Question: Data for Hermann Corporation are shown below: Percentage Per Unit of Sales Sales price $ 90 100 Less: Variable expenses 63 70 Contribution margin $

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.) Sales 1-b. Based on your calculations should the change be made? " Yes 7' 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

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