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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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