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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
Skip to question
[The following information applies to the questions displayed below.]
Data for Hermann Corporation are shown below:
Per Unit | Percent of Sales | |
---|---|---|
Selling price | $ 80 | 100% |
Variable expenses | 52 | 65 |
Contribution margin | $ 28 | 35% |
Fixed expenses are $76,000 per month and the company is selling 4,600 units per month.
Required:
1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $10,000, 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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