Cobble Corporation Produces and Sells a Single Product

question 95

Multiple Choice

Cobble Corporation produces and sells a single product. Data concerning that product appear below: Fixed expenses are $499,000 per month. The company is currently selling 5,000 units per month. The marketing manager would like to cut the selling price by $13 and increase the advertising budget by $33,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 900 units. What should be the overall effect on the company's monthly net operating income of this change?

• A) increase of $56,100
• B) decrease of $8,900
• C) increase of $99,300
• D) decrease of $56,100

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Definitions:

Alkane

A saturated hydrocarbon with single bonds only, having the general molecular formula CnH2n+2, where n is the number of carbon atoms.

Molecular Formula

A notation showing the types and numbers of atoms in a molecule, without indicating their arrangement.

Ethyl

A functional group or moiety consisting of two carbon atoms and five hydrogen atoms (–C2H5), often derived from ethanol.

Dimethyldodecane

An organic compound structured as a dodecane backbone with two methyl groups attached, used in various chemical contexts.