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Required information Exercise 6-5 (Algo) Changes in Variable Costs, Fixed Costs, Selling Price, and Volume [LO6-4] [The following information applies to the questions displayed

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Required information Exercise 6-5 (Algo) Changes in Variable Costs, Fixed Costs, Selling Price, and Volume [LO6-4] [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Percent Per Unit of Sales Selling price Variable expenses Contribution margin 44 $ 80 100% 55 $ 36 45% Fixed expenses are $76,000 per month and the company is selling 2,500 units per month. Exercise 6-5 (Algo) Part 1 Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,100, the monthly sales volume increases by 100 units, and the total monthly sales increase by $8,000? 1-b. Should the advertising budget be increased?

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