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Can you explain it with instructions so Ican used with the next ones________ Data for hermann corporation are shown below Percent Per unit Of sales

Can you explain it with instructions so Ican used with the next ones________

Data for hermann corporation are shown below

Percent

Per unit Of sales

Selling price. 85. 100%

Variable exp. 51. 60%

-------------------------------------------

Contribution margin. 34. 40%

Fixed expense are $77,000 per month and the company is selling 2,600 units per month.

1a. The marketing manager argues that a $8,200 increase in the monthly advertising budget would increase monthly sales by $16 000. Calculate the increase or decrease in net operating income.

Net operating income. By

1b. Should the advertising budget be increased. Yes. No

2a. Refer to the original data. Management is considering using higher-quallty components that would increase the variable expense by $5 per unit. The marketing manager believes that the higher-quallty product would increase sales by 20% per month. Calculate the change in total contribution margin.

Total contribution margin. By. $

2b. Should the higher-quality components be used? Yes no

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