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Required information Skip to question [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Per Unit Percent of
Required information
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[The following information applies to the questions displayed below.]
Data for Hermann Corporation are shown below:
Per Unit | Percent of Sales | ||||||
Selling price | $ | 95 | 100 | % | |||
Variable expenses | 57 | 60 | |||||
Contribution margin | $ | 38 | 40 | % | |||
Fixed expenses are $79,000 per month and the company is selling 3,600 units per month.
rev: 06_04_2020_QC_CS-205709, 06_18_2020_QC_CS-216765, 07_14_2020_QC_CS-216765
Required:
1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,400 and monthly sales increase by $17,100?
1-b. Should the advertising budget be increased?
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