Staley Co Manufactures Computer Monitors

question 70

Multiple Choice

Staley Co. manufactures computer monitors. The following is a summary of its basic cost and revenue data:Assume that Staley Co. is currently selling 600 computer monitors per month and monthly fixed costs are $80,000.

If an $18,000 increase in the advertising budget would increase monthly sales by $60,000, the new level of operating income (πB) for Staley Co. would be:

• A) $19,800.
• B) $21,800.
• C) $24,800.
• D) $23,800.
• E) $20,800.

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Definitions:

Economic Conditions

The state of the economy at a certain time, characterized by factors such as GDP, unemployment rates, and inflation levels.

Open Market

A system where goods, services, and financial instruments are traded freely without restrictions, based on supply and demand forces.

Foreign Competitors

Companies based in one country that compete with those in another country, often affecting market share, pricing strategies, and innovation efforts.

External Environment

The external forces that affect an organization's performance, including economic, technological, socio-cultural, and political factors.