Data Concerning Milian Corporation's Single Product Appear Below

question 79

Essay

Data concerning Milian Corporation's single product appear below:
Fixed expenses are $66,000 per month.The company is currently selling 1,000 units per month.
Required:
Management is considering using a new component that would increase the unit variable cost by $15.Since the new component would improve 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 if fixed expenses are unaffected? Show your work!

---

Definitions:

Stereotypical Thinking

The tendency to categorize individuals or groups into simplistic and fixed categories without allowance for individual variation or complexity.

Propinquity

The physical or psychological proximity between people, which influences their likelihood to form relationships or friendships.

Reciprocity

A mutual exchange of privileges or interactions between parties, often seen as a foundational principle in social relationships.

Dispositional Attributions

The tendency to attribute someone's behavior to their personal characteristics, rather than to situational factors.