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managerial accounting

label Accounting
account_circle Unassigned
schedule 0 Hours
account_balance_wallet $5

The Clyde Corporation's variable expenses are 35% of sales. Clyde Corporation is contemplating an advertising campaign that will cost $28,000. If sales increase by $85,000, the company's net operating income will increase by:

Dec 1st, 2014

                                                                   Clyde Corporation

             Increase in sales                                                                       $85,000

             Less variable expenses($85,000 * 35%)                                    29,750

             Contribution margin                                                                    $55,250

              Less additional advertising campaign expense                          28,000

              increase in operating income                                                     $27,250

Dec 1st, 2014

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