odonary app you you Data for Hermann Corporation are shown below: Percent Per Unit of Sales $ 120 100% 78 65 $ 42 35% Selling price Variable expenses Contribution margin Fixed expenses are $84,000 per month and the company is selling 2,600 units per month. Required: M-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8.900, the monthly sales volume increases by 100 units, and the total monthly sales increase by $12,000? 1-b. Should the advertising budget be increased?
odonary app you you Data for Hermann Corporation are shown below: Percent Per Unit of Sales $ 120 100% 78 65 $ 42 35% Selling price Variable expenses Contribution margin Fixed expenses are $84,000 per month and the company is selling 2,600 units per month. Required: M-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8.900, the monthly sales volume increases by 100 units, and the total monthly sales increase by $12,000? 1-b. Should the advertising budget be increased?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:my v p ne quoun niyo volum
Data for Hermann Corporation are shown below:
Percent
Per Unit of Sales
$ 120
100%
78
65
$ 42
35%
Selling price
Variable expenses
Contribution margin
Fixed expenses are $84,000 per month and the company is selling 2,600 units per month.
Required:
1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8.900, the
monthly sales volume increases by 100 units, and the total monthly sales increase by $12,000?
1-b. Should the advertising budget be increased?
Req 1A
Complete this question by entering your answers in the tabs below.
Answer is complete but not entirely correct.
Reg 18
How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,900, the
monthly sales volume increases by 100 units, and the total monthly sales increase by $12,000? (Do not round intermediate
calculations.)
Not operating income
decreases
by
2,075
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