Question: Data for Hermann Corporation are shown below: Per Unit Percent of Sales Selling price $ 110 100 % Variable expenses 77 70 Contribution margin $

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. Exercise 6-5 Part 2 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 $5 per unit and increase unit sales by 20%. 2-b. Should the higher-quality components be used?

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