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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

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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 Per Unit $ 80 Percent of Sales 52 $ 28 100% 65 35% Fixed expenses are $76,000 per month and the company is selling 4,600 units per month. Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $10,000, the monthly sales volume increases by 100 units, and the total monthly sales increase by $8,000? 1-b. Should the advertising budget be increased?

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