Data for Hermann Corporation are shown below: Per Percentage Unit of Sales Sales price $90 100 Less: Variable expenses 63 70 Contribution margin $27 30 Fixed expenses are $40,000 per month, and the company is selling 2,000 units per month. Required: 1- The marketing manager argues that a $4,000 increase in the monthly 3. advertising budget would increase monthly sales by $9,000. Show the effect of this change on the net income? Complete the table given below to answer the question. (Negative amounts should be Indicated by a minus sign.) Less: Variable ex- - nses Contribution mar, in Less: Fixed ex- - nses Net income loss b Based on your calculations should the change be made? Yes No 2- Refer to the original data. Management is considering using higher-quality a. components that would increase the variable cost by $2.00 per unit. The marketing manager believes the higher-quality product would increase sales by 10% per month. Calculate the change in contribution margin? 2. b Should the higher-quality components be used? Yes No