1. Data for Hermann Corporation are shown below:

	Per Unit	Percent of Sales
Selling price	$ 50	100%
Variable expenses	28	56
Contribution margin	$ 22	44%

Fixed expenses are $70,000 per month and the company is selling 4,000 units per month.

Required:

1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $11,000, the monthly sales volume increases by 100 units, and the total monthly sales increase by $5,000?

1-b. Should the advertising budget be increased?

2. Mauro Products distributes a single product, a woven basket whose selling price is $10 per unit and whose variable expense is $8 per unit. The company’s monthly fixed expense is $2,200.

Required:

1. Calculate the company’s break-even point in unit sales.

2. Calculate the company’s break-even point in dollar sales. 

3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? 

3. Lin Corporation has a single product whose selling price is $136 per unit and whose variable expense is $68 per unit. The company’s monthly fixed expense is $32,400.

Required:

1. Calculate the unit sales needed to attain a target profit of $5,000. 

2. Calculate the dollar sales needed to attain a target profit of $8,400.