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Exercise $6-5($Algo$)$ Changes in Variable Costs, Fixed Costs, Selling Price, and Volume $[$L$06-4]$

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

Data for Hermann Corporation are shown below:

$\backslash$table$[[,$Per Unit,$\backslash$table$[[$Percent$],[$of Sales$]]],[$Selling price,$$65,1008],[$Variable expenses,$39,60],[$Contribution margin,$$26,408]]$

Fixed expenses are $$73,000$ per month and the company is selling $4,300$ units per month.

Exercise $6-5($Algo$)$ 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 $$5$ per unit and increase unit sales by $25\%.$

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

Complete this question by entering your answers in the tabs below.

Req $2$A

Refer to the original data. How much will net operating income increase $($decrease$)$ per month if the company uses higherquality components that increase the variable expense by $$5$ per unit and increase unit sales by $25\%.$

Net operating income

by