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Required information

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Data for Hermann Corporation are shown below:

$\backslash$table$[[,\backslash$table$[[$Percent$],[$Selling price$]]],[$Variable expenses,$$110,1008],[$Contribution margin,$77,70],[,$$$33,308]]$

Fixed expenses are $$82,000$ per month and the company is selling $3,500$ 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 $$5$ per unit and increase unit sales by $20\%.$

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

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

Te$.2A$

Req $2$B

Rel

Req $2A$

quality components that increase the variable expense by $$5$ per unit and increase unit sales by $20\%.$

Net operating income

by

Req $2$A