Ringstaff Corporation Produces and Sells a Single Product

Multiple Choice

Ringstaff Corporation produces and sells a single product. Data concerning that product appear below:
The company is currently selling 7,000 units per month. Fixed expenses are $615,000 per month. The marketing manager believes that a $21,000 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?

A) increase of $600
B) decrease of $600
C) decrease of $21,000
D) increase of $21,600