Data because that Hermann coporation, group are presented below: Fixed prices are $76,000 per month and also the agency is selling 2.500 devices per month. Required: a. The marketing manager argues that a $8, 100 rise in the monthly advertising spending plan would boost monthly sales by $15, 500. Calculation the increase or decrease in net operating income. B. Describe the initial data. Monitoring is considering making use of higher-quality materials that would rise the variable expense by $4 every unit. The marketing manager believes that the higher-quality product would increase sales by 20% per month. Calculate the adjust in total contribution margin.
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Question & Answer: Data for Hermann coporation, group are displayed below: Fixed costs are $76,000 every month and the company is…..
a.Increase in contribution=($15500*45%)=$6975
Less:increase in addressed expenses=$8100
Hence network operating earnings would to decrease by=$1125.
Current donation margin=(36*2500)=$90000
Contribution margin/iunit would be=($80-($44+4))=$32.
Hence total contribution margin would certainly be=(32*(2500*120%)=$96000.
Hence total contribution margin would boost by=($96000-$90000)=$6000.
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