Data Concerning Lemelin Corporation's Single Product Appear Below: the Company

question 256

Multiple Choice

Data concerning Lemelin Corporation's single product appear below: The company is currently selling 7,000 units per month. Fixed expenses are $581,000 per month.
Management is considering using a new component that would increase the unit variable cost by $3. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 200 units. What should be the overall effect on the company's monthly net operating income of this change?

• A) decrease of $22,400
• B) decrease of $1,400
• C) increase of $22,400
• D) increase of $1,400

---

Definitions:

Government Programs

Initiatives and services provided by the government to meet public needs, including healthcare, education, and social welfare.

Feminization of Poverty

The phenomenon whereby women experience poverty at rates that are disproportionately high in comparison to men, often due to lower wages, unemployment, and bearing the socio-economic costs of child-rearing and caregiving.

Federal Poverty Line

A measure of income issued annually by the Department of Health and Human Services used to determine eligibility for certain federal programs and benefits.

Wage Gap

The disparity in earnings between different groups of workers, often defined by gender, race, or age.