[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.

value: 1.25 points

Required information

Required:
1-a.	The marketing manager argues that a $8,100 increase in the monthly advertising budget would increase monthly sales by $15,500. Calculate the increase or decrease in net operating income.

1-b.

Should the advertising budget be increased?

	Yes
	No