Question
Data for Hermann Corporation are shown below Per Unit Percent of Sales Selling Price $90 100%( % of sales) Variable Expenses 63 70% ( %
Data for Hermann Corporation are shown below Per Unit Percent of Sales Selling Price $90 100%( % of sales) Variable Expenses 63 70% ( % of sales) Contribution margin $27 30% ( % of sales) Fixed expenses are $30,000 per month and the company is selling 2,000 units per month. 1. How much will net operating income increase (decrease) per month if the company uses higher- quality components that increase the variable expense by $2 per unit and increase unit sales by 10%.
If you could please lay out the steps clearly. Someone else answered this question, but it did not seem clear to me. Thank you!
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