Data Concerning Marchman Corporation's Single Product Appear Below: the Company

question 5

Multiple Choice

Data concerning Marchman Corporation's single product appear below: The company is currently selling 4,000 units per month. Fixed expenses are $166,000 per month. Consider each of the following questions independently. This question is to be considered independently of all other questions relating to Marchman Corporation. Refer to the original data when answering this question.
Management is considering using a new component that would increase the unit variable cost by $2. Since the new component would increase the features of 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?

• A)decrease of $9,200
• B)increase of $1,200
• C)decrease of $1,200
• D)increase of $9,200

---

Definitions:

Trained Introspection

A method in psychology where trained observers examine and report on the content of their own thoughts.

Structuralism

An early school of psychology that sought to understand the structure of the mind by analyzing the basic elements of thoughts and sensations.

Psychology

The scientific study of the mind and behavior, examining how individuals think, feel, and act.

William James

An American philosopher and psychologist, often referred to as the father of American psychology.