Wertman Corporation Produces and Sells a Single Product with the Following

question 48

Multiple Choice

Wertman Corporation produces and sells a single product with the following characteristics: The company is currently selling 3,000 units per month. Fixed expenses are $215,000 per month. Consider each of the following questions independently.
-This question is to be considered independently of all other questions relating to Wertman Corporation. Refer to the original data when answering this question.
The marketing manager believes that a $7,000 increase in the monthly advertising budget would result in a 110 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 $7,000
• B) increase of $2,240
• C) decrease of $2,240
• D) increase of $9,240

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Definitions:

Separate But Equal

A doctrine that was used to justify racial segregation, asserting that separate facilities for different races were permissible if equal quality was maintained.

Ethnic Minority

An ethnic minority is a group of people who differ in race or color or in national, religious, or cultural origin from the majority of the population.

Solidarity

A unity or agreement of feeling or action, especially among individuals with a common interest; mutual support within a group.

Comprehensive

Inclusive, covering all or nearly all elements or aspects of something.