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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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