Required information

[The following information applies to the questions displayed below.]

Data for Hermann Corporation are shown below:

	Per Unit				Percent of Sales
Selling price	$	125				100	%
Variable expenses		80				64
Contribution margin	$	45				36	%

Fixed expenses are $85,000 per month and the company is selling 2,700 units per month.

Required:

1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,000, the monthly sales volume increases by 100 units, and the total monthly sales increase by $12,500?

1-b. Should the advertising budget be increased?