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Stells [14]
3 years ago
11

The company is currently selling 5,000 units per month. Fixed expenses are $243,000 per month. The marketing manager believes th

at an $11,000 increase in the monthly advertising budget would result in a 180 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
Business
1 answer:
REY [17]3 years ago
7 0

Answer:

If the company decides to increase its advertising budget, its net profits will  decrease by $200 (= $56,800 - $57,000).

Explanation:

The company is currently selling 5,000 units per month at $150 per unit, and its total variable costs are $90 per unit.

Fixed expenses are $243,000 per month.

Current income statement:

sales revenue =                    $750,000

minus variable costs =         ($450,000)

<u>minus fixed costs =              ($243,000)  </u>

net income =                           $57,000

If the company increases its advertising budget be $11,000 it should sell 180 more units per month, the new income statement would be:

sales revenue =                    $777,000

minus variable costs =         ($466,200)

<u>minus fixed costs =              ($254,000)  </u>

net income =                           $56,800

If the company decides to increase its advertising budget, its net profits will  decrease by $200 (= $56,800 - $57,000).

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77julia77 [94]

Answer:

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Explanation:

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3 years ago
A market supply schedule shows the relationship between <br><br><br> please!!!!!!
Phantasy [73]

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Explanation: I HOPED THAT HELPED,!

4 0
2 years ago
Ceramic Customs Co. requires a specific type of ceramic to make custom-made tiles. Since only one supplier makes that particular
kramer

Answer:

a. The supplier has more bargaining power than the firm.

Explanation:

This is an example of one of Porters' five forces. The supplier has a monopoly and thus entertains a high market share. This means that the supplier has more bargaining power than the firm as if the firm wants the ceramic there are no alternative options available for the firm; however, if the firm does not want supplies, the supplier can find plenty of firms that may need the ceramic thus making supplier more powerful than the firm.

Hope that helps.

4 0
3 years ago
It is claimed that mutual funds have two advantages. The first is that mutual funds allow people with small amounts of money to
romanna [79]

Answer:

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Explanation:

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Following is a partial process cost summary for Mitchell Manufacturing's Canning Department. Equivalent Units of Production Dire
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Answer:

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