[The following information applies to the questions displayedbelow.]Data for Hermann Corporation are shown below: Per Unit Percentof SalesSelling price $ 55 100%Variable expenses 33 60% Contribution margin $ 22 40% Fixed expenses are $71,000 per month and the company is selling4,100 units per month.1.value:2.50 pointsRequired informationRequired:1-a.The marketing manager argues that a $9,500 increase in the monthlyadvertising budget would increase monthly sales by $22,500.Calculate the increase or decrease in net operating income. 1-b. Should the advertising budget be increased? Yes NoHintsReferenceseBook & ResourcesHint #1Check my work2.value:2.50 pointsRequired information2-a.Refer to the original data. Management is considering usinghigher-quality components that would increase the variable expenseby $4 per unit. The marketing manager believes that thehigher-quality product would increase sales by 25% per month.Calculate the change in total contribution margin. 2-b. Should the higher-quality components beused? Yes NoGarrison 15e Recheck 2014-12-17HintsReferenceseBook & ResourcesHint #1Check my work
[The following information applies to the questions displayedbelow.] Data for Hermann Corporation a
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