Wilson Company prepared the following preliminary budget assuming no advertising expenditures:
Selling price....................... $10 per unit
Unit sales........................... 100,000
Variable expenses.............. $600,000
Fixed expenses................... $300,000
Based on a market study, the company estimated that it could increase the unit selling price by 15% and increase the unit sales volume by 10% if $100,000 were spent on advertising. Assuming that these changes are incorporated in its budget, what should be the budgeted net operating income?
A) $175,000
B) $190,000
C) $205,000
D) $365,000
