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Hello, I need assistance with this Managerial Accounting question. Required information [The following information applies to the questions displayed below.) Data for Hermann Corporation are
Hello, I need assistance with this Managerial Accounting question.
Required information [The following information applies to the questions displayed below.) Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 110 77 $ 33 Percent of Sales 100% 70 Fixed expenses are $82,000 per month and the company is selling 3,500 units per month. 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 $5 per unit and increase unit sales by 20%. 2-b. Should the higher-quality components be used?
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