Bohlen Corporation Produces and Sells a Single Product

question 35

Multiple Choice

Bohlen Corporation produces and sells a single product. Data concerning that product appear below: Fixed expenses are $716,000 per month. The company is currently selling 6,000 units per month. Consider each of the following questions independently. This question is to be considered independently of all other questions relating to Bohlen Corporation. Refer to the original data when answering this question.
The marketing manager believes that a $20,000 increase in the monthly advertising budget would result in a 180 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?

• A)decrease of $5,920
• B)increase of $5,920
• C)decrease of $20,000
• D)increase of $25,920

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Definitions:

Primary Data

Data collected firsthand by a researcher for a specific research purpose, through experiments, surveys, or observations.

Measurement

The process or act of quantifying objects, events, or phenomena, often using units or methods that have been standardized.

Concepts

Concepts are abstract ideas or mental symbols used to represent objects, conditions, or phenomena within a theoretical framework.

Direct Observation

A research method where information is gathered firsthand by watching subjects in their natural or normal environments.