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Required information [The following information applies to the questions displayed below. Data for Hermann Corporation are shown below: Percent 100% 30% Per Unit of Sales

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Required information [The following information applies to the questions displayed below. Data for Hermann Corporation are shown below: Percent 100% 30% Per Unit of Sales $ 90 Selling price Variable expenses Contribution margin 63 70 $ 27 Fixed expenses are $30,000 per month and the company is selling 2,000 units per month. Required: 1-a. The marketing manager argues that a $5,000 increase in the monthly advertising budget would increase monthly sales by $9,000. Calculate the increase or decrease in net operating income. 1-b. Should the advertising budget be increased

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