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

question 171

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 would like to cut the selling price by $7 and increase the advertising budget by $20,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 500 units. What should be the overall effect on the company's monthly net operating income of this change?

• A) increase of $46,500
• B) decrease of $18,500
• C) decrease of $16,500
• D) increase of $18,500

---

Definitions:

Ability

The competence or skill to do something effectively or achieve a desired result.

Aptitudes

Refers to natural talents or abilities that enable individuals to perform certain tasks effectively.

Competencies

A combination of knowledge, skills, abilities, and other characteristics that enable individuals to perform a job effectively.

Skills

The ability to perform tasks and solve problems due to knowledge, practice, and aptitude.