Asked by Megan Green on Jul 22, 2024
Verified
This question is to be considered independently of all other questions relating to Lemelin Corporation.Refer to the original data when answering this question. The marketing manager would like to cut the selling price by $18 and increase the advertising budget by $37,000 per month.The marketing manager predicts that these two changes would increase monthly sales by 1,600 units.What should be the overall effect on the company's monthly net operating income of this change?
A) increase of $118,200
B) increase of $302,200
C) decrease of $118,200
D) decrease of $7,800
Selling Price
The amount charged to customers for a product or service.
Advertising Budget
The specific amount of money allocated for promoting a product, service, or brand during a set period.
Monthly Sales
The total revenue or units sold by a company in one calendar month.
- Investigate the influence of shifts in marketing tactics, such as the adjustment of advertising budgets and the restructuring of sales commissions, on net operating income.
- Analyze the effects of pricing decisions and advertising spending on company sales and profitability.
Verified Answer
KJ
Kimone JonesJul 27, 2024
Final Answer :
D
Explanation : 
Overall net operating income will decrease by $7,800
Reference: CHO6-Ref21
Thornbrough Corporation produces and sells a single product with the following characteristics:
The company is currently selling 7,000 units per month.Fixed expenses are $901,000 per month.Consider each of the following questions independently.
Overall net operating income will decrease by $7,800Reference: CHO6-Ref21
Thornbrough Corporation produces and sells a single product with the following characteristics:
The company is currently selling 7,000 units per month.Fixed expenses are $901,000 per month.Consider each of the following questions independently.
Learning Objectives
- Investigate the influence of shifts in marketing tactics, such as the adjustment of advertising budgets and the restructuring of sales commissions, on net operating income.
- Analyze the effects of pricing decisions and advertising spending on company sales and profitability.
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