he company is currently selling 6,400 units per month. Fixed expenses are $424,400 per month. The marketing manager believes that a $6,600 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?

The company's net operating income would increase by 2.1875%.

Explanation:

Let the selling price for each unit be $y

Initial quantity sold per month before increase in the advertising budget = 6400 units

Initial income = $6400y

New monthly sales after increase in advertising budget = 6400 + 1400 = 6540 units

New income = $6540y

Increase in income = $6540y - $6400y = $140y

Percentage increase in income = (increase in income : initial income) * 100 = ($140y : $6400) * 100 = 0.021875 * 100 = 2.1875%