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Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 85 51 Percent of Sales 100% 60 40% $

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Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 85 51 Percent of Sales 100% 60 40% $ 34 Fixed expenses are $77,000 per month and the company is selling 2,600 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 $5 per unit and increase unit sales by 20%. 2-6. Should the higher quality components be used? 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 $5 per unit and increase unit sales by 20%. Net operating income by Should the higher-quality components be used? OYes O No

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