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

question 111

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

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Definitions:

Ions

Atoms or molecules that have gained or lost one or more electrons, resulting in a net electric charge.

Radioisotopes

Isotopes of an element that are radioactive; they can be used in scientific research, medicine, and industry.

Biological Molecules

Complex molecules made from chains of organic compounds found within living organisms, including proteins, lipids, carbohydrates, and nucleic acids.

Acidic

Having a pH less than 7, characterized by a higher concentration of hydrogen ions, and capable of donating a proton in a chemical reaction.