Ringstaff corporation produces and sells a single product, Ask an Expert

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Ringstaff Corporation produces and sells a single product. Data concerning that product appear below:

Per Unit Percent of Sales
Selling price : $158 100%
Variable expenses : 39.5 25%
Contribution margin : $118.5 75%

The company is currently selling 6,200 units per month. Fixed expenses are $603,000 per month. The marketing manager believes that a $31,980 increase in the monthly advertising budget would result in a 280 unit increase in monthly sales. What should be the overall effect on the company monthly net operating income of this change ?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9972343

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