Required information

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Data for Hermann Corporation are shown below:

	Per Unit				Percent of Sales
Selling price	$	120				100	%
Variable expenses		78				65
Contribution margin	$	42				35	%

Fixed expenses are $84,000 per month and the company is selling 2,600 units per month.

Required:

1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,900 and monthly sales increase by $18,000?

1-b. Should the advertising budget be increased?