W. Chapter 8 Proposing Changes in Variable Costs, Fixed Costs, Selling Price, and Volume [LO2-CC5] BRIEF EXERCISE 8-3 Data for Hermann Corporation are shown below: Sales price Per Unit Percentage of Sales $90 63 100 70 30 $27 Less: Variable expenses Contribution margin Fixed expenses are $40,000 per month, and the company is selling 2,000 units per month. Required: 1. The marketing manager argues that a $4,000 increase in the monthly advertising budget would incre monthly sales by $9,000. Should the advertising budget be increased? 2. Refer to the original data. Management is considering using higher-quality components that woul increase the variable cost by $2.00 per unit. The marketing manager believes the higher-quality p would increase sales by 10% per month. Should the higher-quality components be used?