A Sales Manager Has Projected That an Increase in the Monthly

question 38

Multiple Choice

A sales manager has projected that an increase in the monthly advertising budget to $25,000 will increase monthly sales from 10,000 units to 12,000 units.Each unit sells for $50 with total variable costs per unit of $40.Monthly fixed expenses,including the current advertising costs of $5,000,total $20,000.Given the above data,what will be the expected impact on net income?

• A) A decrease of $5,000.
• B) A decrease of $110,000.
• C) An increase of $5,000.
• D) No change.

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Definitions:

Equivalent Interest Rate

The interest rate that gives the same compounded financial outcome as other rates calculated over different time periods.

Nearest 0.01%

Rounding off a numerical figure to the closest one hundredth of a percent.

Equivalent Interest Rate

A rate that provides the same accumulated interest as would be obtained from several other interest rates over a given time period.

Nearest 0.01%

Adjusting a value so that it is close to an exact hundredth of a percent, enhancing precision.