Bohlen Corporation Produces and Sells a Single Product

question 157

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:

Develop A Tolerance

The process by which the body increasingly adapts to a substance (such as a drug or alcohol), requiring larger doses to achieve the original effect.

Psychologically Addicted

A condition where an individual experiences a compulsive need for a substance, behavior, or activity, driven by psychological cravings rather than physical dependence.

Progressive Decrease

A continuous reduction or decline in quantity, size, or strength over time.

Response To A Drug

The specific reaction or set of reactions exhibited by an organism following administration of a drug, which can vary widely depending on the individual's genetic makeup, dose, and history of use.