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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 $115 Percent of Sales 69 100% 60 $ 46 40% Fixed expenses are $83,000 per month and the company is selling 2,500 units per month. 2-a. 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 15% 2-b. Should the higher-quality components be used?

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