BUIL LA Required: 1. What is the company's contribution margin (CM) 2. Estimate the change in the company's net operating income il it were W MC de 1 101) EXERCISE 5-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume (L04] Data for Herron Corporation are shown below: Percent of Sales Per Unit $75 45 $30 100% 60% Selling price Variable expenses Contribution margin 40% Fixed expenses are $75,000 per month and the company is selling 3,000 units per month. "equired: The marketing manager believes that an $8,000 increase in the monthly advertising budget would increase monthly sales by $15,000. Should the advertising budget be increased? Refer to the original data. Management is considering using higher-quality components that would increase the variable cost by $3 per unit. The marketing manager believes that the higher-quality product would increase sales by 15% per month. Should the higher-quality components be used? EXERCISE 5-6 Compute the Level of Sales Required to Attain a Target Profit (L05]