[The following information applies to the questions displayed below.]

Data for Herron Corporation are shown below:

	Per Unit			Percent of Sales
Selling price	$	75		100%
Variable expenses		45		60%
Contribution margin	$	30		40%

Fixed expenses are $75,000 per month and the company is selling 3,000 units per month. (Input the amount as a positive value.)

24.

Required information

Required:
1-a.	The marketing manager believes that an $8,000 increase in the monthly advertising budget would increase monthly sales by $15,000. Calculate the increase or decrease in net operating income.

Net operating income

(Click to select)decreasesincreases by

$

1-b.	Should the advertising budget be increased?

	Yes
	No

25.

Required information

2-a.	Management is considering using higher-quality components that would increase the variable cost by $3 per unit. The marketing manager believes that the higher-quality product would increase sales by 15% per month. Calculate the change in total contribution margin.

Total contribution margin (Click to select)increasesdecreases by

$

2-b.	Should the higher-quality components be used?

	Yes
	No

24. The following information applies to the questions displayed below. Data for Herron Corporation are shown below Percent Per Unit of Sales $75 100% Selling price 60% Variable expenses 45 $30 40% Contribution margin Fixed expenses are $75,000 per month and the company ls selling 3,000 units per month. (Input the amount as a positive value.) Required: 1-a. The marketing manager believes that an $8,000 increase in the monthly advertising budget would increase monthly sales by $15,000. Calculate the increase or decrease in net operating income Net operating income (Click to select) T by 1-b. Should the advertising budget be increased? Yes No