Data for Hermann Corporation are shown below: Per Unit Percent of Sales Selling price $ 110 100%
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Question:
Data for Hermann Corporation are shown below:
Per Unit | Percent of Sales | |
---|---|---|
Selling price | $ 110 | 100% |
Variable expenses | 77 | 70 |
Contribution margin | $ 33 | 30% |
Fixed expenses are $82,000 per month and the company is selling 3,500 units per month.
Required
1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,700 and the monthly sales volume increases by 100 units?
1-b. Should the advertising budget be increased?
Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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