Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are...
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Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Percent of Selling price Per Unit $ 85 Sales 100% Variable expenses 51 60 Contribution margin $ 34 40% Fixed expenses are $77,000 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 $8,200 and monthly sales increase by $15,300? 1-b. Should the advertising budget be increased? 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 20%. 2-b. Should the higher-quality components be used? Complete this question by entering your answers in the tabs below. Req 2A Req 2B 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 20%. Net operating income Req 2A Req 2B Should the higher-quality components be used? by Req 2A Req 2B > Yes No Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Percent of Selling price Per Unit $ 85 Sales 100% Variable expenses 51 60 Contribution margin $ 34 40% Fixed expenses are $77,000 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 $8,200 and monthly sales increase by $15,300? 1-b. Should the advertising budget be increased? 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 20%. 2-b. Should the higher-quality components be used? Complete this question by entering your answers in the tabs below. Req 2A Req 2B 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 20%. Net operating income Req 2A Req 2B Should the higher-quality components be used? by Req 2A Req 2B > Yes No
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