Exercise 6-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume [LO6-4] [The following information applies to the questions displayed below.] Data for Hermann 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.

Part 1 Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,100 and monthly sales increase by $15,500? 1-b. Should the advertising budget be increased?