Kuzio Corporation produces and sells a single product. Data concerning that product appear below:
Per Unit Percent of Sales
Selling price....................... $130 100%
Variable expenses.............. 78 60%
Contribution margin.......... $ 52 40%
The company is currently selling 6,000 units per month. Fixed expenses are $263,000 per month. The marketing manager believes that a $5,000 increase in the monthly advertising budget would result in a 140 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 $2,280
B) increase of $7,280
C) decrease of $5,000
D) decrease of $2,280
