Data Concerning Neuner Corporation's Single Product Appear Below

question 9

Essay

Data concerning Neuner Corporation's single product appear below:
Fixed expenses are $425,000 per month. The company is currently selling 4,000 units per month.
Required:
The marketing manager would like to cut the selling price by $11 and increase the advertising budget by $23,700 per month. The marketing manager predicts that these two changes would increase monthly sales by 400 units. What should be the overall effect on the company's monthly net operating income of this change? Show your work!

---

Definitions:

Strategic Management

The ongoing planning, monitoring, analysis, and assessment necessary to meet an organization's goals and objectives, often involving consideration of internal and external environments.

Strategy Formulation

The process of defining an organization’s strategy or direction and making decisions on allocating its resources to pursue this strategy.

Strategic Marketing

The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.

Strategic Outsourcing

The practice of delegating certain operational functions to external entities to reduce costs, improve efficiency, or focus on core competencies.