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Houpe Corporation Produces and Sells a Single Product

Question 150

Multiple Choice

Houpe Corporation produces and sells a single product. Data concerning that product appear below: Houpe Corporation produces and sells a single product. Data concerning that product appear below:   Fixed expenses are $490,000 per month. The company is currently selling 6,000 units per month.The marketing manager believes that a $14,000 increase in the monthly advertising budget would result in a 150 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change? A)  increase of $700 B)  increase of $14,700 C)  decrease of $14,000 D)  decrease of $700 Fixed expenses are $490,000 per month. The company is currently selling 6,000 units per month.The marketing manager believes that a $14,000 increase in the monthly advertising budget would result in a 150 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?


A) increase of $700
B) increase of $14,700
C) decrease of $14,000
D) decrease of $700

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