Whirly Corporation's contribution format income statement for the most recent month is shown below: Sales (7,400 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $ 236,800 140,600 96, 200 54,100 $ 42,100 Per Unit $ 32.00 19.00 $ 13.00 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 100 units? 2. What would be the revised net operating income per month if the sales volume decreases by 100 units? 3. What would be the revised net operating income per month if the sales volume is 6,400 units? 1. Revised net operating income 2. Revised net operating income 3. Revised net operating income Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Per Unit $ 110 Selling price Variable expenses Contribution margin Percent of Sales 100% 70 30% 77 $ 33 Fixed expenses are $82,000 per month and the company is selling 3,500 units per month. Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,700 and monthly sales increase by $19,800? 1-b. Should the advertising budget be increased? Complete this question by entering your answers in the tabs below. Req 1A Req 1B How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,700 and monthly sales increase by $19,800? (Round any unit calculations up to the nearest whole unit.) Net operating income by Required information [The following information applies to the questions displayed below.) Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 110 77 $ 33 Percent of Sales 100% 70 30% Fixed expenses are $82,000 per month and the company is selling 3,500 units per month. Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,700 and monthly sales increase by $19,800? 1-b. Should the advertising budget be increased? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Should the advertising budget be increased? Yes ONO Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 110 77 $ 33 Percent of Sales 100% 70 30% Fixed expenses are $82,000 per month and the company is selling 3,500 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 $5 per unit and increase unit sales by 20%. 2-b. Should the higher-quality components be used? Complete this question by entering your answers in the tabs below. Req 2A Reg 2B Should the higher-quality components be used? Yes ONO
