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Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 90 63 Percent of Sales 100% 70 $ 27

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Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 90 63 Percent of Sales 100% 70 $ 27 30% Fixed expenses are $30,000 per month and the company is selling 2,000 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 $2 per unit and increase unit sales by 10%. 2-b. Should the higher-quality components be used? Net operating income by Should the higher-quality components be used? Yes ONO

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