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.
A
You might also like to view...
The researcher's task ends with the oral presentation
Indicate whether the statement is true or false
The Public Company Accounting Oversight Board (PCAOB) was created to determine the standards that auditors must follow
Indicate whether the statement is true or false
Using a combination of approaches tends to confuse prospects and rarely results in identifying customer needs
Indicate whether the statement is true or false
Which of the following is a limitation of the revenue-oriented pricing approach?
a. High tax rates b. Difficulty in determining costs c. High economies of scale d. Difficulty in communicating to consumers