Craylon Manufacturing produces a single product that sells for $100. Variable costs per unit equal...
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Craylon Manufacturing produces a single product that sells for $100. Variable costs per unit equal $25. The company expects total fixed costs to be $70,000 for the next month at the projected sales level of 1,400 units. In an attempt to improve performance, management is considering a number of alternative actions. Each situation is to be evaluated separately. One alternative is to increase advertsing expenses by $12,000. What is the effect on operating income with the increase of advertising expenses? A. Operating income will decrease by $23,000. B. Operating income will increase by $23,000. C. Operating income will increase by $12,000. D. Operating income will decrease by $12,000.
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