Question
Data for Hermann Corporation are shown below: Per Unit Percent of Sales Selling price $ 95 100 % Variable expenses 57 60 Contribution margin $
Data for Hermann Corporation are shown below:
Per Unit | Percent of Sales | ||||||
Selling price | $ | 95 | 100 | % | |||
Variable expenses | 57 | 60 | |||||
Contribution margin | $ | 38 | 40 | % | |||
Fixed expenses are $79,000 per month and the company is selling 3,600 units per month.
Garrison 16e Rechecks 2017-05-02
Required:
1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,400 and monthly sales increase by $17,000?
1-b. Should the advertising budget be increased?
Req 1A
Req 1B
How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,400 and monthly sales increase by $17,000? (Do not round intermediate calculations.)
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