Question: Exercise 6-5 (Algo) Changes in Variable Costs, Fixed Costs, Selling Price, and Volume [LO6-4] [The following information applies to the questions displayed below.] Data for

 Exercise 6-5 (Algo) Changes in Variable Costs, Fixed Costs, Selling Price,
and Volume [LO6-4] [The following information applies to the questions displayed below.]
Data for Hermann Corporation are shown below: Fixed expenses are $80,000 per

Exercise 6-5 (Algo) Changes in Variable Costs, Fixed Costs, Selling Price, and Volume [LO6-4] [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Fixed expenses are $80,000 per month and the company is selling 3,700 units per month. Exercise 6.5 (Algo) Part 1 Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,500, the monthly sales volume increases by 100 units, and the total monthly sales increase by $10,000 ? 1-b. Should the advertising budget be increased? How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,500, the monthly sales volume increases by 100 units, and the total monthly sales increase by $10,000 ? (Do not round intermediate calculations.) Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higherquality components that increase the variable expense by $3 per unit and increase unit sales by 15%

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