This Question Is to Be Considered Independently of All Other

question 6

Multiple Choice

This question is to be considered independently of all other questions relating to Homme 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 $16. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 500 units. What should be the overall effect on the company's monthly net operating income of this change?

• A)increase of $2,000
• B)decrease of $2,000
• C)decrease of $30,000
• D)increase of $30,000

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