Data concerning Homme Corporation's single product appear below:

\ { Selling price ................ } & \$ 190 The company is currently selling 2,000 units per month. Fixed expenses are $130,000 per month.

Consider each of the following questions independently. This question is to be considered independently of all other questions relating to Homme Corporation. Refer to the original data when answering this question. Management is considering using a new component that would increase the unit variable cost by $16. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 500 units. What should be the overall effect on the company's monthly net operating income of this change?

b.This question is to be considered independently of all other questions relating to Homme Corporation. Refer to the original data when answering this question. The marketing manager believes that a $12,000 increase in the monthly advertising budget would result in a 190 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?

c. This question is to be considered independently of all other questions relating to Homme Corporation. Refer to the original data when answering this question. The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $14 per unit. In exchange, the sales staff would accept a decrease in their salaries of $24,000 per month. (This is the company's savings for the entire sales staff.) The marketing manager predicts that introducing this sales incentive would increase monthly sales by 100 units. What should be the overall effect on the company's monthly net operating income of this change?

d This question is to be considered independently of all other questions relating to Homme Corporation. Refer to the original data when answering this question. The marketing manager would like to cut the selling price by $18 and increase the advertising budget by $8,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 700 units. What should be the overall effect on the company's monthly net operating income of this change?

Sellingprice................Variableexpenses......Contributionmargin..PerUnit$19011440%PercentofSales100%60%40%