Need explanation Changes in Variable Costs, Fixed Costs, Selling Price, and Volume Data for Hermann Corporation are shown below: Per Unit Percent of Sales Selling price $ 80 100% Variable expenses 44 55 Contribution margin $ 36 45% Fixed expenses are $76,000 per month and the company is selling 2,500 units per month. 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,100, the monthly sales volume increases by 100 units, and the total monthly sales increase by $8,000? 1-b. Should the advertising budget be increased?
Need explanation Changes in Variable Costs, Fixed Costs, Selling Price, and Volume Data for Hermann Corporation are shown below: Per Unit Percent of Sales Selling price $ 80 100% Variable expenses 44 55 Contribution margin $ 36 45% Fixed expenses are $76,000 per month and the company is selling 2,500 units per month. 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,100, the monthly sales volume increases by 100 units, and the total monthly sales increase by $8,000? 1-b. Should the advertising budget be increased?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter3: Cost Behavior
Section: Chapter Questions
Problem 5CE: Refer to Cornerstone Exercise 3.4 for data on Dohini Manufacturing Companys purchasing cost and...
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Need explanation
Changes in Variable Costs, Fixed Costs, Selling Price, and Volume
Data for Hermann Corporation are shown below:
|
Per Unit |
Percent of Sales |
Selling price |
$ 80 |
100% |
Variable expenses |
44 |
55 |
Contribution margin |
$ 36 |
45% |
Fixed expenses are $76,000 per month and the company is selling 2,500 units per month.
1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,100, the monthly sales volume increases by 100 units, and the total monthly sales increase by $8,000?
1-b. Should the advertising budget be increased?
![Required:
1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,100, the
monthly sales volume increases by 100 units, and the total monthly sales increase by $8,000?
1-b. Should the advertising budget be increased?
Complete this question by entering your answers in the tabs below.
Req 1A
Req 1B
How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,100,
the monthly sales volume increases by 100 units, and the total monthly sales increase by $8,000? (Do not round intermediate
calculations.)
Net operating income
by](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F78d7be80-233f-42fa-8c01-70bc4da57dc5%2F868bc0f1-d439-440e-bc94-2aa56d0d56ea%2F78zxk93_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required:
1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,100, the
monthly sales volume increases by 100 units, and the total monthly sales increase by $8,000?
1-b. Should the advertising budget be increased?
Complete this question by entering your answers in the tabs below.
Req 1A
Req 1B
How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,100,
the monthly sales volume increases by 100 units, and the total monthly sales increase by $8,000? (Do not round intermediate
calculations.)
Net operating income
by
![Required:
1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,100, the
monthly sales volume increases by 100 units, and the total monthly sales increase by $8,000?
1-b. Should the advertising budget be increased?
Complete this question by entering your answers in the tabs below.
Req 1A
Req 1B
Should the advertising budget be increased?
Yes
ONO](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F78d7be80-233f-42fa-8c01-70bc4da57dc5%2F868bc0f1-d439-440e-bc94-2aa56d0d56ea%2F9lhuve9_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required:
1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,100, the
monthly sales volume increases by 100 units, and the total monthly sales increase by $8,000?
1-b. Should the advertising budget be increased?
Complete this question by entering your answers in the tabs below.
Req 1A
Req 1B
Should the advertising budget be increased?
Yes
ONO
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