ch 5 hw1

5 Part 1 of 2 25 points Required Information Exercise 5-5 (Algo) Changes in Variable Costs, Fixed Costs, Selling Price, and Volume (LO5-4) [The following information applies to the questions displayed below) Data for Hermann Corporation are shown below Percent of Per Unit Sales Selling price $80 1000 Variable expenses Contribution margin $.28 354 Book 52 Hint Seferences Fixed expenses are $76,000 per month and the company is selling 4,600 units per month Exercise 5-5 (Algo) Part 1 Required: 10. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $10,000, the monthly sales volume increases by 100 units, and the total monthly sales increase by $8,000? 1-6. Should the advertising budget be increased? Complete this question by entering your answers in the tabs below. Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $10,000, the monthly sales volume increases by 100 units, and the total monthly sales increase by $8,000? (Do not round intermediate calculations.) Net operating income by 1 Reg 18> Exercise 5-5 (Algo) Part 2 2-a. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $5 per unit and increase unit sales by 25% 2-b. Should the higher quality components be used? Complete this question by entering your answers in the tabs below. Reg 2A Reg 20 Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher quality components that increase the variable expense by $5 per unit and increase unit sales by 25%. Net Operating income by Reg 28 >