Data for Hermann Corporation are shown below:

	Per Unit	Percent of Sales
Selling price	$90	100%
Variable expenses	63	70
Contribution margin	$27	30%

Fixed expenses are $30,000 per month and the company is selling 2,000 units per month.Page 221

Required:

1. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $5,000, the monthly sales volume increases by 100 units, and the total monthly sales increase by $9,000?

2. 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 $2 per unit and increase unit sales by 10%.