Data for Hermann Corporation are shown below

Per Unit Percent of Sales

Selling price $ 80 100 %

Variable expenses 44 55

Contribution margin $ 36 45 %

Fixed expenses are $76,000 per month and the company is selling 2,500 units per month.

2-a. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $4 per unit and increase unit sales by 20%.

2-b. Should the higher-quality components be used?