[The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Per Unit $120 78 Percent of Sales 100% 65% Selling price Variable expenses Contribution margirn $ 42 35% Fixed expenses are $84,000 per month and the company is selling 2,600 units per month. Required: 1-a. The marketing manager argues that a $8,900 increase in the monthly advertising budget would increase monthly sales by $19,500. Calculate the increase or decrease in net operating income. Net operating income 1-b. Should the advertising budget be increased? Yes No 2-a. Refer to the original data. Management is considering using higher-quality components that would increase the variable expense by $5 per unit. The marketing manager believes that the higher-quality product would increase sales by 20% per month. Calculate the change in total contribution margin. Total contribution margin 2-b. Should the higher-quality components be used? Yes No [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Per Unit $120 78 Percent of Sales 100% 65% Selling price Variable expenses Contribution margirn $ 42 35% Fixed expenses are $84,000 per month and the company is selling 2,600 units per month. Required: 1-a. The marketing manager argues that a $8,900 increase in the monthly advertising budget would increase monthly sales by $19,500. Calculate the increase or decrease in net operating income. Net operating income 1-b. Should the advertising budget be increased? Yes No 2-a. Refer to the original data. Management is considering using higher-quality components that would increase the variable expense by $5 per unit. The marketing manager believes that the higher-quality product would increase sales by 20% per month. Calculate the change in total contribution margin. Total contribution margin 2-b. Should the higher-quality components be used? Yes No