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.)