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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 Percent of
Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Selling price Variable expenses Percent of Per Unit $ 105 Sales 100% 63 $ 42 60 40% Contribution margin Fixed expenses are $81,000 per month and the company is selling 3,800 units per month. Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,600, the monthly sales volume increases by 100 units, and the total monthly sales increase by $10,500? 1-b. Should the advertising budget be increased?
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