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Data for Hermann Corporation are shown below: Percent of Sales 100% 60 Per Unit $ 130 78 $ 52 Selling price Variable expenses Contribution margin

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Data for Hermann Corporation are shown below: Percent of Sales 100% 60 Per Unit $ 130 78 $ 52 Selling price Variable expenses Contribution margin 40% Fixed expenses are $86,000 per month and the company is selling 2,800 units per month. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,100 and monthly sales increase by $19,500? (Round any unit calculations up to the nearest whole unit.) Net operating income by Should the advertising budget be increased? OYes O No 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 $6 per unit and increase unit sales by 15%. Net operating income by Should the higher-quality components be used? OYes O No

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