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Change in net operating income
All right so there are some inconsistencies with this problem I am working on and I cannot find out what I am doing wrong.
The question asks
Fixed expenses are $531,000 per month. The company is currently selling 4,000 units per month. The marketing manager would like to cut the selling price by $14 and increase the advertising budget by $35,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 500 units. What should be the overall effect on the company's monthly net operating income of this change?
And provides the table below.
So I lined everything up in excel
See he4.jpg & he5.jpg
Was I supposed to allocate the increase in the advertising budget to something else besides fixed expenses?