63 70% $27 30% Fixed expenses are $30000 per month and the company

63

70%

$27

30%

Fixed expenses are $30000 per month and the company is selling 2000 units per month.

(a)

Calculate the increase or decrease in net operating income if a $5000 increase in the monthly advertising budget would increase monthly
sales by $9000.
net operating income: ?
Refer to the original data. Management is considering using higher-quality components that would increase the variable cost by $2 per unit.
The marketing manager believes the higher-quality product would increase sales by 10% per month. Should the higher-quality components be
used?