Question
Data for Herron Corporation are shown below: Per Unit Percent of Sales Selling price $ 80 100% Variable expenses 44 55% Contribution margin $ 36
Data for Herron Corporation are shown below: Per Unit Percent of Sales Selling price $ 80 100% Variable expenses 44 55% Contribution margin $ 36 45% Fixed expenses are $76,000 per month and the company is selling 2,500 units per month. 5. value: 10.00 points Required information Required: 1-a. The marketing manager believes that an $8,100 increase in the monthly advertising budget would increase monthly sales by $15,500. Calculate the increase or decrease in net operating income. Refer to the original data. Management is considering using higher-quality components that would increase the variable cost by $4 per unit. The marketing manager believes that the higher-quality product would increase sales by 20% per month. Calculate the change in total contribution margin. Refer to the original data. Management is considering using higher-quality components that would increase the variable cost by $4 per unit. The marketing manager believes that the higher-quality product would increase sales by 20% per month. Calculate the change in total contribution margin.
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