Kuzio Corporation produces and sells a single product. Data concerning that product appear below: Per UnitPercent of SalesSelling price$140? 100%Variable expenses 84? 60?%Contribution margin$56? 40?%?The company is currently selling 5300 units per month. Fixed expenses are $185,000 per month. The marketing manager believes that a $5300 increase in the monthly advertising budget would result in a 200 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 $11,200
B. decrease of $5300
C. decrease of $5900
D. increase of $5900
Answer: D
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