Question: Exercise 5-5 (Algo) Changes in Variable Costs, Fixed Costs, Selling Price, and Volume (L05-4) [The following information applies to the questions displayed below.) Data for
Exercise 5-5 (Algo) Changes in Variable Costs, Fixed Costs, Selling Price, and Volume (L05-4) [The following information applies to the questions displayed below.) Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 70 49 $ 21 Percent of Sales 1008 70 30 Fixed expenses are $74,000 per month and the company is selling 4,400 units per month Exercise 5-5 (Algo) 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 $4 per unit and increase unit sales by 25%. 2-b. Should the higher-quality components be used
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