Laro Corporation Produces and Sells a Single Product with the Following

question 90

Multiple Choice

Laro Corporation produces and sells a single product with the following characteristics:The company is currently selling 5,000 units per month. Fixed expenses are $302,000 per month. Consider each of the following questions independently.
-This question is to be considered independently of all other questions relating to Laro 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 $7.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 $1,000
• B)Decrease of $1,000
• C)Increase of $34,000
• D)Decrease of $34,000

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Definitions:

Leisure Time

Free time spent away from work, business, or compulsory activities, often used for relaxation or hobbies.

Burnout

A state of physical, emotional, and mental exhaustion caused by prolonged stress, often resulting from overwork or workplace frustration.

Idealistic

Characterized by the pursuit or belief in high and often unrealistic goals or principles.

Extraverted

A personality trait characterized by being outgoing, talkative, and energized by interactions with other people.