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Required information The following information applies to the questions displayed below Data for Hermann Corporation are shown below Percent of Per Unit Sales 100% $

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Required information The following information applies to the questions displayed below Data for Hermann Corporation are shown below Percent of Per Unit Sales 100% $ 65 39 Selling price Variable expenses 60 40% Contribution margin $ 26 Fixed expenses are $73,000 per month and the company is selling 4,300 units per month Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,700 and monthly sales increase by $23,500? 1-b. Should the advertising budget be increased? Required information The following information applies to the questions displayed below Data for Hermann Corporation are shown below Percent of Sales 100% Per Unit Selling price Variable expenses $ 65 39 60 $ 26 Contribution margi 40% Fixed expenses are $73,000 per month and the company is selling 4,300 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 $5 per unit and increase unit sales by 25%. 2-b. Should the higher-quality components be used

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