Data for Hermann Corporation are shown below:

	Per Unit				Percent of Sales
Selling price	$	75				100	%
Variable expenses		51				68
Contribution margin	$	24				32	%

Fixed expenses are $75,000 per month and the company is selling 4,000 units per month.

Required:

1-a. The marketing manager argues that a $9,900 increase in the monthly advertising budget would increase monthly sales by $24,500. Calculate the increase or decrease in net operating income.

1-b. Should the advertising budget be increased?

Complete this question by entering your answers in the tabs below. Req 1A Req 1B The marketing manager argues that a $9,900 increase in the monthly advertising budget would increase monthly sales by $24,500. Calculate the increase or decrease in net operating income. (Do not round intermediate calculations.) Net operating income by