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

question 201

Multiple Choice

Data concerning Sotero Corporation's single product appear below: The company is currently selling 5,000 units per month. Fixed expenses are $319,000 per month. Consider each of the following questions independently.
-This question is to be considered independently of all other questions relating to Sotero 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 $8. 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) increase of $38,000
• D) decrease of $38,000

---

Definitions:

Board-Centered Leadership

A leadership strategy that emphasizes the central role of the board of directors in governance and decision-making.

Chief Executive Officer

The highest-ranking executive in a company, responsible for making major corporate decisions, managing operations, and setting strategic directions.

Nonprofit Boards

Governing bodies responsible for overseeing the mission, strategic direction, and financial policies of nonprofit organizations.

Critical Issues

Significant, urgent problems or challenges that require immediate attention and action to avoid negative consequences.