Current | Proposed | |
Sales | (2600*85)=221000 | (221000+15300)=236300 |
Variable expenses | (2600*51)=132600 | (236300*60%)=141780 |
Contribution margin | 88400 | 94520 |
Fixed expenses | 77000 | (77000+8200)=85200 |
Net operating income | 11400 | 9320 |
Hence net operating income decreases by=(11400-9320)
=$(2080)
Hence advertising budget should not be increased(NO)
! Required information [The following information applies to the questions displayed below.) Data for Hermann Corporation...
! 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 $ 85 51 $ 34 Percent of Sales 100% 60 404 Fixed expenses are $77,000 per month and the company is selling 2,600 units per month Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,200 and monthly sales increase by $15,300? 1-b....
Required information (The following information applies to the questions displayed below.) Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Percent Per Unit of Sales $ 90 1005 63 70 $ 27 30% Fixed expenses are $30,000 per month and the company is selling 2,000 units per month. Required: 1-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,...
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Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Per Unit $ 110 Percent of Sales 100% Selling price Variable expenses Contribution margin 77 70 in $ 33 30% Fixed expenses are $82,000 per month and the company is selling 3,500 units per month. Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,700 and monthly sales increase by $18,500? 1-b....
Required information The following information applies to the questions displayed below.) Data for Hermann Corporation are shown below: Per Unit $ 55 Percent of Sales 100% Selling price Variable expenses Contribution margin $ 22 40% Fixed expenses are $71,000 per month and the company is selling 4,100 units per month. Required 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,500 and monthly sales increase by $22,500? 1-b. Should the advertising...
[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 $130 78 $ 52 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 budget...
Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Percent of Per Unit Sales Selling price Variable expenses $135 100% 60 81 Contribution margin $ 54 40% Fixed expenses are $87,000 per month and the company is selling 2,900 units per month. Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,200 and monthly sales increase by $21,000? 1-b. Should the...
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 $ 110 77 $ 33 Percent of Sales 100% 70 30% Fixed expenses are $82,000 per month and the company is selling 3,500 units per month. Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,700 and monthly sales increase by $18,500? 1-b. Should...
Required intormation [The following information applies to the questions displayed below.) Data for Hermann Corporation are shown below: Per Unit $ 110 Selling price Variable expenses Contribution margin Percent of Sales 100$ 70 30% 77 $ 33 Fixed expenses are $82,000 per month and the company is selling 3,500 units per month. Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,700 and monthly sales increase by $18,500? 1-b. Should...
Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Percent Per Unit of Sales $ 90 100% 63 $ 27 3 0 70 Fixed expenses are $30,000 per month and the company is selling 2,000 units per month. Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $5,000 and monthly sales increase by $9,000? 1-b....