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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

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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 $ 80 1000 52 65 $ 28 359 Fixed expenses are $76,000 per month and the company is selling 4,600 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 25%. 2.b. Should the higher quality components be used? Complete this question by entering your answers in the tabs below. Req 2A Req 28 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 25% Not operating incomo by 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 $ 80 1001 52 65 $ 28 351 Fixed expenses are $76,000 per month and the company is selling 4,600 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 25%. 2-b. Should the higher quality components be used? Complete this question by entering your answers in the tabs below. Reg 2A Reg 28 Should the higher-quality components be used? Yes No

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