A.decrease of $1,000B. decrease of $55,000C. increase of $26,200D. increase of $191,000Overall net operating income will decrease by $1,000AACSB: AnalyticAICPA BB: Critical ThinkingAICPA FN: MeasurementBlooms: ApplyDifficulty: 2 MediumLearning Objective: 05-04 Show the effects on net operating income of changes in variable costs; fixed costs;selling price; and volume.

119.This question is to be considered independently of all other questions relating to Marchman Corporation. Refer to the original data when answering this question.The marketing manager would like to cut the selling price by $7 and increase the advertising budget by $11,000 per month. The marketing manager predicts that thesetwo changes would increase monthly sales by 800 units. What should be the overall effect on the company's monthly net operating income of this change? A. increase of $21,800B. decrease of $21,800C. increase of $79,400D.decrease of $6,200Overall net operating income will decrease by $6,200AACSB: AnalyticAICPA BB: Critical ThinkingAICPA FN: MeasurementBlooms: ApplyDifficulty: 2 MediumLearning Objective: 05-04 Show the effects on net operating income of changes in variable costs; fixed costs;selling price; and volume.Bohlen Corporation produces and sells a single product. Data concerning that product appear below:Fixed expenses are $716,000 per month. The company is currently selling 6,000 units per month. Consider each of the following questions independently.

120.This question is to be considered independently of all other questions relating to Bohlen Corporation. Refer to the original data when answering this question.The marketing manager believes that a $20,000 increase in the monthly advertising budget would result in a 180 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change? A. decrease of $5,920B.increase of $5,920C. decrease of $20,000D. increase of $25,920Overall net operating income will increase by $5,920AACSB: AnalyticAICPA BB: Critical ThinkingAICPA FN: MeasurementBlooms: ApplyDifficulty: 1 EasyLearning Objective: 05-04 Show the effects on net operating income of changes in variable costs; fixed costs;selling price; and volume.

121.This question is to be considered independently of all other questions relating to Bohlen Corporation. Refer to the original data when answering this question.Management is considering using a new component that would increase the unit variable cost by $8. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 400 units. What should be the overall effect on the company's monthly net operating income of this change? A. increase of $54,400B. decrease of $54,400C. decrease of $6,400D.increase of $6,400Overall net operating income will increase by $6,400AACSB: AnalyticAICPA BB: Critical ThinkingAICPA FN: MeasurementBlooms: ApplyDifficulty: 1 EasyLearning Objective: 05-04 Show the effects on net operating income of changes in variable costs; fixed costs;selling price; and volume.

122.