Question

I don't know what I'm doing wrong. I tried both 1900 and -1900 and it says it's wrong. Can someone work this out for me?

Return to question 2 ! Required information Part 1 of 2 [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: 2 points Selling price Variable expenses Contribution margin Per Unit $ 115 69 Percent of Sales 100% 60 $ 46 40% Fixed expenses are $83,000 per month and the company is selling 2,500 units per month. Required: 1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,800 and monthly sales increase by $17,250? 1-b. Should the advertising budget be increased?

Answer 1

Ansiner PG Io9 5 Decrease in Net ( $32000 - $30,100) Present operating Income Bigoo Projected (287500+ 17,250) $ 304 750 seling price $ 287500 ($115x soo) Less! vaniable $117.2 500) $182,850) 60% of Selling price contribution $1,1 5,000 15 $ 121,900 lessi- fixed Expense $183,000) $183,000+ 8,800) 20 Net $ 30,100 per- $32,000 ating Income 25 lob No, Advertising budget should because be increased we increase advertising 30 budget, Net operating in lome will decreape