EXERCISE 5-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume (1.04 Data for Hermann Corporation are shown below: Seling price Variable expenses Contribution margin Per Unit Percent of Sales $90 100% 63 70 $27 30% Fixed expenses are $30,000 per month and the company is selling 2,000 units per month Cost-Volume Profit Relationships Required: 1. The marketing manager argues that a $5,000 increase in the monthly advertising budget would increase monthly sales by S9,000. Should the advertising budget be increased? 2. Refer to the original data, Management is considering using higher quality components that would increase the variable expense by $2 per unit. The marketing manager believes that the higher-quality product would increase sales by 10% per month. Should the higher-quality components be used