A Company's Manager Estimates That in the Upcoming Year, Decreasing

question 85

Multiple Choice

A company's manager estimates that in the upcoming year, decreasing advertising costs by $50,000 will cause sales revenue to decrease by $120,000. If the company's contribution margin ratio is 35%, what will be overall effect on net operating income?

• A) Net operating income will increase by $8,000.
• B) Net operating income will decrease by $8,000.
• C) Net operating income will increase by $24,500.
• D) Net operating income will decrease by $24,500.

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Definitions:

Cognitive Psychologist

A professional specializing in the study of mental processes such as "attention, language use, memory, perception, problem-solving, creativity, and thinking."

Cognitive Perspective

A psychological approach that focuses on how people perceive, think, understand, and remember information.

Noam Chomsky

is a renowned linguist and cognitive scientist known for his theory of generative grammar, significantly influencing the field of linguistics.

Theoretical Perspective

a set of assumptions about reality that informs the questions we ask and the kinds of answers we arrive at as researchers or theorists in understanding sociological, psychological, or other phenomena.