Requirement 2 a | ||||
Present | If higher quality component used | |||
Sales | (4300 unitsX $65) | 279500 | (4300 units X125%X65) | 349375 |
Variable expenses | (4300 unitsX $39) | 167700 | (4300 units X125%X44) | 236500 |
Contribution margin | 111800 | 112875 | ||
Fixed Expenses | 73000 | 73000 | ||
Net operating income | 38800 | 39875 | ||
Increase in net operating income (39875-38800) = $1,075 | ||||
Requirement 2 b | ||||
Higher quality components should be used as there is increase in net operating income |
Required information [The following information applies to the questions displayed below Data for Hermann Corporation are...
Required information [The following information applies to the questions displayed below.) Data for Hermann Corporation are shown below: Percent of Sales 100% Selling price Variable expenses Contribution margin Per Unit $ 115 69 $ 46 60 40% Fixed expenses are $83,000 per month and the company is selling 2.500 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...
Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 130 78 Percent of Sales 100% 60 40% Fixed expenses are $86,000 per month and the company is selling 2,800 units per month. Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,100 and monthly sales increase by $20,500? 1-b. Should the advertising...
Required information [The following information applies to the questions displayed below.) Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 90 63 $ 27 Percent of Sales 100% 70 30% 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...
Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Per Unit $ 90 Percent of Sales 100% Selling price Variable expenses Contribution margin 63 70 30% 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...
Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Percent of Sales 100% Selling price Variable expenses Contribution margin Per Unit $ 75 51 $ 24 68 32% Fixed expenses are $75,000 per month and the company is selling 4,000 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...
Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 140 91 Percent of Sales 100% 65 35% $ 49 Fixed expenses are $88,000 per month and the company is selling 3,000 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...
Check Required information (The following information applies to the questions displayed below.) Data for Hermann Corporation are shown below: Per Unit Percent of Sales 1000 70 Selling price Variable expenses Contribution margin $ 110 $ 33 306 Fixed expenses are $82,000 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...
Required information [The following information applies to the questions displayed below.) Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 125 80 $ 45 Percent of Sales 100% 64 36% Fixed expenses are $85,000 per month and the company is selling 2,700 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...
Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Percent of Sales 100% 70 Per Unit $ 110 77 $ 33 Selling price Variable expenses Contribution margin 30% Fixed expenses are $82,000 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...
Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Percent of Sales 100% 60 Per Unit $ 85 51 Selling price Variable expenses Contribution margin $ 34 40% Fixed expenses are $77,000 per month and the company is selling 2,600 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...