Thornbrough Corporation produces and sells a single product with the following characteristics: Per UnitPercent of SalesSelling price$220 100%Variable expenses 44 20%Contribution margin$176 80%The company is currently selling 7,000 units per month. Fixed expenses are $901,000 per month.The marketing manager believes that a $28,000 increase in the monthly advertising budget would result in a 190 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
A. increase of $5,440
B. increase of $33,440
C. decrease of $28,000
D. decrease of $5,440
Answer: A
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