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Required information Exercise 6-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume (L06-4) [The following information applies to the questions displayed below) Data for Hermann Corporation are shown below: Percent of Sales 1008 Per Unit $120 20 selling price Variable expenses Contribution margin Fixed expenses are $84,000 per month and the company is selling 2,600 units per month, Exercise 6-5 Part 2 2-1. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher quality components that increase the variable expense by $5 per unit and increase unit sales by 20% 2.b. Should the higher quality components be used? Complete this question by entering your answers in the tabs below. Reg 2 Reg 28 Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher quality components that increase the variable expense by $5 per unit and increase unit sales by 204 Netruiting it came Reg 28) Required information Exercise 6-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume (L06-4) [The following information applies to the questions displayed below.) Data for Hermann Corporation are shown below. Per Unit $120 Selling price Variable expenses Contribution margin Percent of Sales 1008 65 350 $42 Fixed expenses are $84,000 per month and the company is selling 2.600 units per month Exercise 6-5 Part 2 2-a. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher quality components that increase the variable expense by $5 per unit and increase unit sales by 20% 2.b. Should the higher-quality components be used? Complete this question by entering your answers in the tabs below. Reg 2A Reg 28 Should the higher-quality components be used? Yes NO

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