Carlo Company Makes Bulk Quantities of Cleaning Fluids

question 156

Multiple Choice

Carlo Company makes bulk quantities of cleaning fluids. They currently sell 1,000 containers a month at a price of $22 per unit. If they added a disinfectant, they could charge $25 per unit for the improved product. It would cost them a total of $3,800 per month to make that alteration. What would be the effect on operating income?

• A)It would decline by $1,200.
• B)It would increase by $3,000.
• C)It would increase by $400.
• D)It would decline by $800.

Understand the concept and benefits of customer loyalty programs.

Explain the process of developing a promotion budget and strategies involved.

Understand the importance of crisis management in public relations.

Identify the different approaches and methods for promotion budgeting.

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Definitions:

Dividend

A portion of a company's earnings distributed to shareholders, typically in cash or additional stock.

Real Interest Rates

The interest rate adjusted for inflation, representing the true cost of borrowing and the real yield to investors.

Supply of Savings

The total amount of savings that households are willing to provide at various interest rates, often influencing investment and economic activity.

Demand for Investment

The amount of spending on investment goods, such as machinery and buildings, that businesses and governments are willing to undertake at various interest rates.