Data for Hermann Corporation are shown below:

Per Unit

Percent of Sales

Selling price

$

60

100%

Variable expenses

39

65%

Contribution margin

$

21

35%

Fixed expenses are $72,000 per month and the company is selling 4,200 units per month.

2-a.

Refer to the original data. Management is considering using higher-quality components that would increase the variable expense by $4 per unit. The marketing manager believes that the higher-quality product would increase sales by 25% per month. Calculate the change in total contribution margin. The total contribtion margin increases or decreases? and by how much?