Required information Exercise 5-7 (Algo) Changes in Variable Costs, Fixed Costs, Selling Price, and Unit Sales...

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Required information Exercise 5-7 (Algo) Changes in Variable Costs, Fixed Costs, Selling Price, and Unit Sales [LO5-7] [The following information applies to the questions displayed below] Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 130 78 Percent of Sales 100% 60 40% $ 52 Fixed expenses are $86,000 per month and the company is selling 2,800 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 15%. 2-b. Should the higher-quality components be used? Complete this question by entering your answers in the tabs below. Required 2A Required 2B 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 15%. Net operating income by Required information Exercise 5-7 (Algo) Changes in Variable Costs, Fixed Costs, Selling Price, and Unit Sales [LO5-7] [The following information applies to the questions displayed below] Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 130 78 Percent of Sales 100% 60 40% $ 52 Fixed expenses are $86,000 per month and the company is selling 2,800 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 15%. 2-b. Should the higher-quality components be used? Complete this question by entering your answers in the tabs below. Required 2A Required 2B 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 15%. Net operating income by