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Accounting

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Required information
[The following information applies to the questions displayed below.]
Data for Hermann Corporation are shown below:
Fixed expenses are $78,000 per month and the company is selling 3,500 units per month.
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 $4 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.
Req 2A
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 $4 per unit and increase unit sales by 20%.
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