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

question 92

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.
The marketing manager believes that a $12,000 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 $3,120
• B) increase of $3,120
• C) decrease of $12,000
• D) increase of $15,120

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Definitions:

Process-Oriented

An approach focusing on the processes and operations within an organization, aiming at improving efficiency and effectiveness.

Work Cells

An arrangement in a manufacturing environment where all the necessary machines and equipment are placed close together to manufacture a product, improving coordination and efficiency.

Level Material Use

A strategy in production planning that aims for a constant rate of material use, minimizing fluctuations in inventory levels.

Repetitive Manufacturing

A production method where the same products or components are produced in a continuous flow or on a repetitive basis.