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Data for Hermann Corporation are shown below: Fixed expenses are $30,000 per month and the company is selling 2,000 units per month. Refer to the

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Data for Hermann Corporation are shown below: Fixed expenses are $30,000 per month and the company is selling 2,000 units per month. Refer to the original data. Management is considering using higher-quality components that would increase the variable expense by $2 per unit. The marketing manager believes that the higher-quality product would increase sales by 10% per month. Calculate the change in total contribution margin. Total contribution margin decreases or increases? By how much? Should the higher quality components be used? Yes No

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