Question: Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 80 52 s 28 Percent of Sales 1008 65

Data for Hermann Corporation are shown below: Selling price Variable expenses

Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 80 52 s 28 Percent of Sales 1008 65 35% Fixed expenses are $76,000 per month and the company is selling 4,600 units per month. 2-a. Refer to the original data. Management is considering using higher-quality components that would increase the variable expense by $5 per unit. The marketing manager believes that the higher-quality product would increase sales by 25% per month. Calculate the change in total contribution margin. 2-b. Should the higher-quality components be used? Complete this question by entering your answers in the tabs below Req 2A Req 2B Refer to the original data. Management is considering using higher-quality components that would increase the variable expense by $5 per unit. The marketing manager believes that the higher-quality product would increase sales by 25% per month. Calculate the change in total contribution margin Total contribution margin by Prex of 24 Next >

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