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[The following information applies to the questions displayed below.] 20. Data for Hermann Corporation are shown below: Per Unit Percent of Sales Selling price $
[The following information applies to the questions displayed below.]
20. Data for Hermann Corporation are shown below:
Per Unit | Percent of Sales | |
---|---|---|
Selling price | $ 140 | 100% |
Variable expenses | 91 | 65 |
Contribution margin | $ 49 | 35% |
Fixed expenses are $88,000 per month and the company is selling 3,000 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 $6 per unit and increase unit sales by 20%.
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