How much will net operating income increase per month

Assignment Help Managerial Accounting

Reference no: EM132834508

Problem - Data for Hermann Corporation are shown below:

	Per Unit	Percent of Sales
Selling price	$90	100%
Variable expenses	63	70
Contribution margin	$27	30%

Fixed expenses are $30,000 per month and the company is selling 2,000 units per month.

Required -

a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $5,000, the monthly sales volume increases by 100 units, and the total monthly sales increase by $9,000?

b. Should the advertising budget be increased?

Reference no: EM132834508

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