Required information

Exercise $5-7($Algo$)$ Changes in Variable Costs, Fixed Costs, Selling Price, and Unit Sales $[$LO$5-7]$

$[$The following information applies to the questions displayed below.$]$

Data for Hermann Corporation are shown below:

Fixed expenses are $$88,000$ per month and the company is selling $3,000$ units per month.

Exercise $5-7($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 $$6$ per unit and increase unit sales by $20\%.$

$2-$b$.$ Should the higher$-$quality components be used?