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Data for Hermann Corporation are shown below:

Per Unit Percent of Sales Selling price $ 50 100% Variable expenses 28 56 Contribution margin $ 22 44%

Fixed expenses are $70,000 per month and the company is selling 4,000 units per month.

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 $4 per unit and increase unit sales by 25%.

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

Req 2A ' Req ZB 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 $4 per unit and increase unit sales by 25%. l l Req 23 > _l l decreases '