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Required information Exercise 6-5 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: Selling price Variable expenses Contribution margin Per Unit $ 85 51 $ 34 Percent of Sales 100% 60 40% Fixed expenses are $77,000 per month and the company is selling 2,600 units per month. Exercise 6-5 Part 1 Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,200 and monthly sales increase by $15,300? 1-b. Should the advertising budget be increased? S oc Next > Required information 2 Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,200 monthly sales increase by $15,300? 1-b. Should the advertising budget be increased? Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,200 and monthly sales increase by $15,300? (Round any unit calculations up to the nearest whole unit.) es Net operating income by K Req1A Req 1B Required information Exercise 6-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume (LO6-4] [The following information applies to the questions displayed below.) 2 of 2 Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 85 51 Percent of Sales 100% 60 40% Book $ 34 Hint Fixed expenses are $77,000 per month and the company is selling 2,600 units per month. rint Tences 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? GN Dron WIN Next >