Data for Hermann Corporation are shown below:

Per Unit Percent of Sales

Selling price $ $140\mathrm{,\; 1}00\%$

Variable expenses $91\mathrm{,\; 6}5$

Contribution margin $ $49\mathrm{,\; 3}5\%$

Fixed expenses are $$88,000$ per month and the company is selling $3,000$ units per month.

 

 

Required:

$1-$a$.$ How much will net operating income increase $($decrease$)$ per month if the monthly advertising budget increases by $$9,300$ and monthly sales increase by $$21,000?$

$1-$b$.$ Should the advertising budget be increased?

Answer rating: 100% (QA)

1a To calculate the increase or decrease in net operating income NOI per month we need to determine ... View the full answer