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Data for Hermann Corporation are shown below: Per Unit Percent of Sales Selling price $ 55 100% Variable expenses 33 60 Contribution margin $ 22
Data for Hermann Corporation are shown below:
Per Unit | Percent of Sales | |
---|---|---|
Selling price | $ 55 | 100% |
Variable expenses | 33 | 60 |
Contribution margin | $ 22 | 40% |
Fixed expenses are $71,000 per month and the company is selling 4,100 units per month.
Exercise 6-5 (Algo) Part 2
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 25%.
Net operating income (increases/decreases) by (?)
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