Decrease of [tex]\$8,900[/tex] should be the overall effect on the company's monthly net operating income of this change.
Option-B
Solution:
The sales add up to a cumulative of [tex]\$800[/tex], eight hundred dollars [tex](5000 \ units\times \$160; \ 5900 \ units\times \$147)[/tex]
Variable expenses being 240,000 and Contribution type being margin being 560,000 (five hundred thousand sixty thousand);
Fixed expenses add up to a cumulative of an approximate 499,000 (four hundred thousand nine hundred and ninety nine)
Net operating income would be [tex]\$61,000[/tex] (sixty one thousand) and the decrease would be [tex]\$8,900[/tex].
