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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

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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 $ 90 63 $ 27 Percent of Sales 1001 70 305 Fixed expenses are $78,000 per month and the company is selling 3,500 units per month. 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 $4 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 ZA Reg 28 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 $4 per unit and increase unit sales by 20% Not operating income Dy 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 $ 90 63 $ 27 Percent of Sales 1000 70 308 Fixed expenses are $78,000 per month and the company is selling 3,500 units per month. 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 $4 per unit and increase unit sales by 20%. 2-5. Should the higher-quality components be used? Complete this question by entering your answers in the tabs below. Reg 2A Reg 28 Should the higher quality components be used? Yes No

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