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 $4 per unit and increase unit sales by 20%.

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

Required information Exercise 6-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume (LO6-4] [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 105 63 $ 42 Percent of Sales 100% 60 40% Fixed expenses are $81,000 per month and the company is selling 3,800 units per month