Question
Data for Herron Corporation are shown below: Per Unit Percent of Sales Selling price $ 75 100% Variable expenses 45 60% Contribution margin $ 30
| Data for Herron Corporation are shown below: |
| Per Unit | Percent of Sales | |||
| Selling price | $ | 75 | 100% | |
| Variable expenses | 45 | 60% | ||
| | | | | |
| Contribution margin | $ | 30 | 40% | |
| | | | | |
| | ||||
| Fixed expenses are $75,000 per month and the company is selling 3,000 units per month. |
| 2-a. | Management is considering using higher-quality components that would increase the variable cost by $3 per unit. The marketing manager believes that the higher-quality product would increase sales by 15% per month. Calculate the change intotal contribution margin. |
| Total contribution margin by | $ |
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Authors: Emanuelx S. Hayes
1st Edition
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