Thornbrough Corporation Produces and Sells a Single Product with the Following

question 170

Multiple Choice

Thornbrough Corporation produces and sells a single product with the following characteristics: The company is currently selling 7,000 units per month. Fixed expenses are $901,000 per month.The marketing manager would like to cut the selling price by $18 and increase the advertising budget by $53,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 1,000 units. What should be the overall effect on the company's monthly net operating income of this change?

• A) decrease of $105,000
• B) increase of $149,000
• C) increase of $105,000
• D) decrease of $21,000

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Definitions:

Retrieval

The process of recalling information stored in long-term memory.

Major Causes

Principal factors or reasons that contribute significantly to the occurrence of a condition, event, or situation.

Iconic Memory

Visual sensory memory, lasting only a fraction of a second.

Echoic Memory

Auditory sensory memory, lasting only 2 to 4 seconds.