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Houpe Corporation produces and sells a single product




Houpe Corporation produces and sells a single product. Data concerning that product appear below;Per Unit Percent of Sales;Selling price...$140 100%;Variable expenses..42 30%;Contribution margin..$ 98 70%;Fixed expenses are $490,000 per month. The company is currently selling 6,000 units per month. Consider each of the following questions independently.;This question is to be considered independently of all other questions relating to Houpe 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 $28,000 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?;Answer;a. increase of $17,500;b. increase of $38,500;c. decrease of $24,500;d. decrease of $17,500


Paper#29528 | Written in 18-Jul-2015

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