Question: 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

 Required information Exercise 6-5 Changes in Variable Costs, Fixed Costs, Selling

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: Percent of Sales Per Unit $135 Selling price Variable expenses 100 60 Contribution margin $ 54 40% Fixed expenses are $87000 per month and the company is selling 2,900 units per month 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? Complete this question by entering your answers in the tabs below. Req 2A Req 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 $5 per unit and increase unit sales by 20%. Req 2B >

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