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Anna [14]
3 years ago
12

Data concerning Pellegren Corporation's single product appear below: Fixed expenses are $531,000 per month. The company is curre

ntly selling 4,000 units per month. The marketing manager would like to cut the selling price by $14 and increase the advertising budget by $35,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 500 units. What should be the overall effect on the company's monthly net operating income of this change? Select one: a. decrease of $18,000 b. increase of $38,000 c. decrease of $38,000 d. increase of $58,000

Business
1 answer:
GrogVix [38]3 years ago
6 0

Answer:

a. decrease of $18,000

Explanation:

The calculation of overall effect on the company's monthly net operating income is shown below:-

<u>Particulars          Current                  Proposed </u>

Sales               $800,000                 $837,000

                     ($200 × 4,000) (200 - 14) × (4,000 + 500)

Variable

expenses          $160,000               $180,000

                     (40 × 4,000)              (40 × (4,000 + 500))

Contribution

margin              $640,000                $657,000

Fixed

expenses           $531,000                 $566,000

                                               ($531,000 + 350,00)

Net operating

income                  $109,000              $91,000

Decrease in net operating income is

= $109,000 - $91000

= $18,000

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 The Hebron is basically offering the various types of services on the basis of the category of mental stimulus processing such as consulting. Therefore, Mental stimulus processing is the correct answer.

4 0
3 years ago
Bob Bungler, owner of Bungler Appraisals, has received an assignment to appraise a property located in a small town that has one
umka2103 [35]

<u>Answer:</u>

<em>(A) Principle of Supply and Demand </em>

<u>Explanation:</u>

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3 0
3 years ago
Reporting changes in Equipment on Statement of Cash Flows An analysis of the general ledger accounts indicates that delivery equ
KiRa [710]

Answer:

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3 years ago
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Marta_Voda [28]

Answer:

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So in this situation, the component organizational method could help for knowing the strategic and the operational information so that it would be easy for comparing the profits between these three fashion houses

Therefore the option b is correct

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sure, what do you need?

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