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Find how much net operating income increase per month

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Reference no: EM132537573

Data for Hermann Corporation are shown below:

Per Unit Percent of Sales

Selling price $115 100%

Variable expenses 69 60

Contribution margin. $46 40%

Fixed expenses are $83,000 per month and the company is selling 2,500 units per month.

Required:

Question 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,800 and monthly sales increase by $19,000?

Question 1-b. Should the advertising budget be increased?

Reference no: EM132537573

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