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Shelhorse Corporation produces and sells a single product. Data concerning that product appear below: ...

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Accounting

Shelhorse Corporation produces and sells a single product. Data concerning that product appear below:
Per Unit Percent of Sales
Selling price $ 240100%
Variable expenses 6025%
Contribution margin $ 18075%
Fixed expenses are $364,000 per month. The company is currently selling 5,900 units per month.
Required:
The marketing manager believes that a $21,000 increase in the monthly advertising budget would result in a 130 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?

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