Wrobbel Corporation Produces and Sells a Single Product

question 86

Essay

Wrobbel Corporation produces and sells a single product. Data concerning that product appear below: Fixed expenses are $307,000 per month. The company is currently selling 6,000 units per month.
Required:
Management is considering using a new component that would increase the unit variable cost by $2. 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:

Psychological Principles

Foundational concepts or laws within psychology that explain mental functions and behaviors, including learning, perception, motivation, and emotion among others.

Therapeutic Relationship

The professional bond between a therapist and a client, which is foundational for effective therapy and characterized by trust, respect, and understanding.

Existential Therapy

A form of psychotherapy that emphasizes individual freedom, choice, and responsibility, focusing on the client's experience in the present moment.

Behavior Therapy

Behavior Therapy is an approach to psychotherapy that focuses on modifying dysfunctional behaviors through conditioning and other learning techniques.