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Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 55 33 $ 22 Percent of Sales 100% 6e
Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 55 33 $ 22 Percent of Sales 100% 6e 48x Fixed expenses are $71,000 per month and the company is selling 4,100 units per month Exercise 5-5 Part 2 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. 2-6. Should the higher quality components be used? Complete this question by entering your answers in the tabs below. Req 2A Req 2B 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. Total contribution margin increases by 13,000 Reg 2 Req 2B >
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