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Zinaida [17]
4 years ago
12

Turtle Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Sel

ling price $ 150 100 % Variable expenses 60 40 % Contribution margin $ 90 60 % The company is currently selling 7,000 units per month. Fixed expenses are $209,000 per month. The marketing manager believes that a $7,100 increase in the monthly advertising budget would result in a 190 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:
hichkok12 [17]4 years ago
5 0

Answer:

Operating income variance= $10,000

The increase in advertising will have a positive effect on operating income.

Explanation:

Giving the following information:

Per Unit Percent of Sales Selling price $ 150 100 % Variable expenses 60 40 % Contribution margin $ 90 60 % The company is currently selling 7,000 units per month. Fixed expenses are $209,000 per month. The marketing manager believes that a $7,100 increase in the monthly advertising budget would result in a 190 unit increase in monthly sales.

Price= $150

Contribution margin= $90

Operating income variance= (contribution margin* units) - increase in costs

Operating income variance= (190*90)- 7100= $10,000

The increase in advertising will have a positive effect on operating income.

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3 0
3 years ago
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Answer:

$4,800

Explanation:

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8 0
3 years ago
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6 0
2 years ago
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11111nata11111 [884]

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