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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

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 $ 90 100 % Variable expenses 63 70 Contribution margin $ 27 30 % Fixed expenses are $78,000 per month and the company is selling 3,500 units per month. Garrison 16e Rechecks 2017-05-02 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?

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