Ask Question
1 June, 14:48

Dybala corporation produces and sells a single product. data concerning that product appear below: the company is currently selling 5,000 units per month. fixed expenses are $173,000 per month. the marketing manager believes that an $6,000 increase in the monthly advertising budget would result in a 170 unit increase in monthly sales. what should be the overall effect on the company's monthly net operating income of this change

+2
Answers (1)
  1. 1 June, 17:40
    0
    The given problem lacks the data about the price of the single product. However assuming that the selling price is similarly $44 which I got from other references, then we can now calculate for the net change of the monthly operating income.

    So to solve for the change, we use the formula:

    Change in net operating income = Increase in units * Selling price - Increase in advertising budget

    Change in net operating income = 170 * $44 - $6,000

    Change in net operating income = $1,480

    Since the change is positive, then it is a good decision to increase the monthly advertising budget by $6,000.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Dybala corporation produces and sells a single product. data concerning that product appear below: the company is currently selling 5,000 ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers