FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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**UKJPQX588 Corp. Cost, Price, and Sales Data**

**Per Unit:**
- **Selling price:** $224
- **Variable expenses:** $46
- **Contribution margin:** $178

---

- **Current Sales:** UKJPQX588 is selling 6,400 units per month.
- **Fixed Expenses:** $896,000 per month.

---

**Proposed Changes:**
- The sales manager plans to reduce the selling price by $20.
- Increase advertising spending by $36,000 per month.
- It is believed these changes will increase monthly sales quantity by 20%.

**Question:**
What would be the overall effect on UKJPQX588’s monthly net operating income due to this change?

(Note: A POSITIVE number indicates an INCREASE in net operating income, and a NEGATIVE number indicates a DECREASE in net operating income.)

---

**Multiple Choice Options:**
- $44,768 dollars
- -$6,920 dollars
- -$10,752 dollars
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Transcribed Image Text:**UKJPQX588 Corp. Cost, Price, and Sales Data** **Per Unit:** - **Selling price:** $224 - **Variable expenses:** $46 - **Contribution margin:** $178 --- - **Current Sales:** UKJPQX588 is selling 6,400 units per month. - **Fixed Expenses:** $896,000 per month. --- **Proposed Changes:** - The sales manager plans to reduce the selling price by $20. - Increase advertising spending by $36,000 per month. - It is believed these changes will increase monthly sales quantity by 20%. **Question:** What would be the overall effect on UKJPQX588’s monthly net operating income due to this change? (Note: A POSITIVE number indicates an INCREASE in net operating income, and a NEGATIVE number indicates a DECREASE in net operating income.) --- **Multiple Choice Options:** - $44,768 dollars - -$6,920 dollars - -$10,752 dollars
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