Question
Data for Hermann Corporation are shown below: Per Unit Percent of Sales Selling price $ 115 100% Variable expenses 69 60 Contribution margin $ 46
Data for Hermann Corporation are shown below: Per Unit Percent of Sales Selling price $ 115 100% Variable expenses 69 60 Contribution margin $ 46 40% Fixed expenses are $83,000 per month and the company is selling 2,500 units per month. Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,800, the monthly sales volume increases by 100 units, and the total monthly sales increase by $11,500? b. Should the advertising budget be increased?
How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,800, the monthly sales volume increases by 100 units, and the total monthly sales increase by $11,500? (Do not round intermediate calculations.)
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