Multiple Choice
Montclair Company earns an average contribution margin ratio of 40% on its sales.The local store manager estimates that he can increase monthly sales volume by $45,000 by spending an additional $7,000 per month for direct mail advertising.Compute the monthly increase in operating income if the manager's estimate about the increased sales volume is accurate.
A) $11,000
B) $23,000
C) $16,000
D) $18,000
Correct Answer:
Verified
Correct Answer:
Verified
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