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Data for Hermann Corporation are shown below:

	Per Unit	Percent of Sales
Selling price	$ 75	100%
Variable expenses	51	68
Contribution margin	$ 24	32%

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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	$ 75	100%
Variable expenses	51	68
Contribution margin	$ 24	32%

Fixed expenses are $75,000 per month and the company is selling 4,000 units per month.

Required:

1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,900, the monthly sales volume increases by 100 units, and the total monthly sales increase by $7,500?

1-b. Should the advertising budget be increased?

Fixed expenses are $75,000 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?

Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Fixed expenses are $75,000 per month and the company is selling 4,000 units per month. Required: -a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,900, the nonthly sales volume increases by 100 units, and the total monthly sales increase by $7,500 ? -b. Should the advertising budget be increased? Complete this question by entering your answers in the tabs below. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,900, the monthly sales volume increases by 100 units, and the total monthly sales increase by $7,500 ? (Do not round intermediate calculations.) Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Fixed expenses are $75,000 per month and the company is selling 4,000 units per month. -a. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-quality omponents that increase the variable expense by $4 per unit and increase unit sales by 25%. -b. Should the higher-quality components be used? Complete this question by entering your answers in the tabs below. 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 $4 per unit and increase unit sales by 25%