Data concerning Neuner Corporation's single product appear below:
Fixed expenses are $425,000 per month.The company is currently selling 4,000 units per month.
Required:
The marketing manager would like to cut the selling price by $11 and increase the advertising budget by $23,700 per month.The marketing manager predicts that these two changes would increase monthly sales by 400 units.What should be the overall effect on the company's monthly net operating income of this change? Show your work!
Definitions:
Brake Rotors
The disc, most commonly made of cast iron, against which the caliper clamps the brake pads to slow the vehicle.
Vented Rotors
Brake rotors designed with internal cooling fins to dissipate heat generated during braking.
Large Vehicles
Vehicles of considerable size, often used to refer to trucks, buses, or heavy equipment.
Solid Rotors
Brake rotors without internal ventilation channels, often used in less demanding applications than vented rotors.
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