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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.
Exercise 5-5 (Algo) Part 1
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?
1-b. Should the advertising budget be increased?
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