Principles of Managerial Accounting Cost Volume Profit

Data for Herron Corporation are shown below

per unit percent of sales

Selling price	$74	100%
Variable expenses	45	60%
Contribution margin	$30	40%

Fixed expenses are $75,000 per month and the company is selling 3,000 units per month.

Required:

1. The marketing manager believes that an $8,000 increase in the monthly advertising budget would increase monthly sales by $15,000. Should the advertising budget be increased?

2. Refer to the original data. Management is considering using higher-quality components that would increase the variable cost by $3 per unit. The marketing manager believes that the higher-quality product would increase sales by 15% per month. Should the higher-quality components be used?

3. Prepare a cost-volume-profit graph for the company and estimate the companys break-even point in unit sales using your cost-volume-profit graph.

4. Prepare a profit graph for the company and estimate the companys break-even point in unit sales using your profit graph

note

please show the work in execl , thanks