Hobby Cat Toy Company has estimated the following amounts for its next fiscal year: If the company spends an additional $34,000 on advertising, sales volume would increase by 2,900 units. What effect will this decision have on the operating income?
Total fixed expenses $833,500
Sales price per unit 40
Variable expenses per unit 25
a) Operating income will decrease by $72,500 (B) Operaing income will increase by 9,500 (C) Operating income will increase by 116,000 (D) Operating income will increase by $43,500
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