Advertising expense basics


If the selling price per unit were to drop $2, from $100 to $98, the sales volume were to increase 500 units to 4,500 units per month, and advertising expense were to increase by $1,000:

a. the break-even point would increase.

b. the break-even point would decrease.

c. the contribution margin ratio would increase.

d. operating income would decrease.

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Accounting Basics: Advertising expense basics
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