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managerial accounting

Accounting
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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

Solution:-

 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 net operating income                                              $27,250


Apr 7th, 2015

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