Data Concerning Grodi Corporation's Single Product Appear Below

question 89

Multiple Choice

Data concerning Grodi Corporation's single product appear below:
Fixed expenses are $324,000 per month. The company is currently selling 5,000 units per month. Management is considering using a new component that would increase the unit variable cost by $9. 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) decrease of $4,500
• B) decrease of $40,500
• C) increase of $40,500
• D) increase of $4,500

---

Definitions:

Corporation Dissolved

The process by which a corporation formally ceases operations, liquidates its assets, and terminates its legal existence.

Various Ways

This term indicates the presence of multiple methods or approaches to achieve a goal or solve a problem.

Reverse Share Split

A corporate action where a company reduces the total number of its outstanding shares to increase the per-share value of the stock, without changing the company's market capitalization.

Number Of Shares

The total amount of shares of stock that a company has issued to shareholders, representing ownership in the corporation.