5.3

! Required information (The following information applies to the questions displayed below.) Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 110 77 Percent of Sales 100% 70 30% $ 33 Fixed expenses are $82,000 per month and the company is selling 3,500 units per month. Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,700 and monthly sales increase by $19,800? 1-b. Should the advertising budget be increased? Complete this question by entering your answers in the tabs below. Req 1A Req 1B How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,700 and monthly sales increase by $19,800? (Round any unit calculations up to the nearest whole unit.) Net operating income by Req 1A Req 1B > Complete this question by entering your answers in the tabs below. Req 1A Req 1B Should the advertising budget be increased? Yes No