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

question 267

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:

American Firms

Companies or businesses that are based in the United States, operating either domestically or internationally, and governed by American laws and economic policies.

Personal Responsibility and Work Opportunity Reconciliation Act

A 1996 US federal law aimed at reforming welfare programs, encouraging work, and reducing dependency on government assistance.

Welfare

Government programs designed to support the well-being of the population by providing financial aid, healthcare, and other services to those in need.

Bill Clinton

An American politician who served as the 42nd president of the United States from 1993 to 2001, known for his centrist policies and leadership during the country's longest period of peacetime economic expansion.