Exercise $2-5($Algo$)$ Changes in Variable Costs, Fixed Costs, Selling Price, and Volume $[$LO$2-4]$

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Data for Hermann Corporation are shown below:

Per Unit Percent of Sales

Selling price $ $90100\%$

Variable expenses $6370$

Contribution margin $ $2730\%$

Fixed expenses are $$78,000$ per month and the company is selling $3,500$ units per month.

Exercise $2-5($Algo$)$ Part $2$

$2-$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 $$4$ per unit and increase unit sales by $20\%.$

$2-$b$.$ Should the higher$-$quality components be used?