The following information applies to the questions displayed below.]

Data for Hermann Corporation are shown below:

	Per Unit				Percent of Sales
Selling price	$	80				100	%
Variable expenses		44				55
Contribution margin	$	36				45	%

Fixed expenses are $76,000 per month and the company is selling 2,500 units per month.

2-a. 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?