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Required information Exercise 5-5 (Static) Changes in Variable Costs, Fixed Costs, Selling Price, and Volume [LO5-4) [The following information applies to the questions displayed below) Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Percent Per Unit of Sales $ 90 100% 63 70 $ 27 304 Fixed expenses are $30,000 per month and the company is selling 2,000 units per month Exercise 5-5 (Static) 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 $2 per unit and increase unit sales by 10%. 2-b. Should the higher-quality components be used? Complete this question by entering your answers in the tabs below. Ches 7 pixeu expenses are you per month and une company is Seung 4,000 units per monn. of 2 Exercise 5-5 (Static) 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 $2 per unit and increase unit sales by 10%. 2-b. Should the higher quality components be used? Complete this question by entering your answers in the tabs below. ok Req 2A Reg 28 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 $2 per unit and increase unit sales by 10%. aces Net operating income by KROG ZA Reg 2 > Exercise 5-6 (Static) Break-Even Analysis (LO5-5) Mauro Products distributes a single product, a woven basket whose selling price is $15 per unit and whose variable expense is $12 per unit. The company's monthly fixed expense is $4,200. Required: 1. Calculate the company's break-even point in unit sales. 2. Calculate the company's break-even point in dollar sales. 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? k baskets 1. Break-even point in unit sales 2. Break-even point in dollar sales 3. Break-even point in unit sales Break even point in dollar sales baskets Exercise 5-6 (Static) Break-Even Analysis (LO5-5) Mauro Products distributes a single product, a woven basket whose selling price is $15 per unit and whose variable expense is $12 per unit. The company's monthly fixed expense is $4,200. Required: 1. Calculate the company's break-even point in unit sales. 2. Calculate the company's break-even point in dollar sales. 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? k baskets 1. Break-even point in unit sales 2. Break-even point in dollar sales 3. Break-even point in unit sales Break even point in dollar sales baskets
