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Please Help [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Per Unit Percent of Sales Selling price

Please Help

[The following information applies to the questions displayed below.]

Data for Hermann Corporation are shown below:

Per Unit Percent of Sales
Selling price $ 115 100 %
Variable expenses 69 60
Contribution margin $ 46 40 %

Fixed expenses are $83,000 per month and the company is selling 2,500 units per month.

Rechecks 2017-05-02

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 15%.

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

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