Data for Hermann Corporation are shown below:

1-b. Based on your calculations should the change be made? 0 Yes 0 No 2-a. Refer to the original data. Management is considering using higher-quality components that would increase the variable cost by $2.00 per unit. The marketing manager believes the higher-quality product would increase sales by 10% per month. Calculate the change in contribution margin? 3 Should the higher-quality components be used? 0 Yes 0 No Data for Hermann Corporation are shown below: Percentage Per Unit of Sales Sales price $ 90 100 Less: Variable expenses 63 70 Contribution margin $ 27 30 Fixed expenses are $40,000 per month, and the company is selling 2,000 units per month. Required: 1-a. The marketing manager argues that a $4,000 increase in the monthly advertising budget would increase monthly sales by $9,000. Show the effect of this change on the net income? Complete the table given below to answer the question. (Negative amounts should be indicated by a minus sign.) _ $ 180.000 $ 189.000 $ Less Variable expenses 126,000 214,200 Contribution margin 54,00 Less: Fixed expenses 40,000 Net income (loss) $ 68,000