Shelhorse Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales
Selling price $220 100%
Variable expenses 66 30%
Contribution margin $154 70%

Fixed expenses are $362,000 per month. The company is currently selling 5,700 units per month.

Required:
The marketing manager believes that a $19,000 increase in the monthly advertising budget would result in a 130 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?

The change in the net operating income will be "$1,020".

Explanation:

According to the question, the values will be:

Sales,

Variable expenses,

Contribution margin,

Fixed expenses:

The net income will be:

hence,

The change in the net operating income will be:

=

=

= ($)

answer; possession utility;

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