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! Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution

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! Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Percent Per Unit of Sales $ 95 57 100% 60 $ 38 40% Fixed expenses are $79,000 per month and the company is selling 3,600 units per month. 2-a. Refer to the data above. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $3 per unit and increase unit sales by 10%. (See below for a hint if you are having trouble getting to the right answer.) 2-b. Should the higher-quality components be used?

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