Required information

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Data for Hermann Corporation are shown below:

	Per Unit	Percent of Sales
Selling price	$ 125	100%
Variable expenses	80	64
Contribution margin	$ 45	36%

Fixed expenses are $85,000 per month and the company is selling 2,700 units per month.

Required:

1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,000, the monthly sales volume increases by 100 units, and the total monthly sales increase by $12,500?

1-b. Should the advertising budget be increased?