urse: 18FALL-ACCT21 XHmwk CVP | Not secure l eztor h education.com hm tp 0962237

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urse: 18FALL-ACCT21 XHmwk CVP | Not secure l eztor h education.com hm tp 096223756053761211536765840316 Data for Hermann Corporation are shown below Per Unit S 80 52 Percent of Sales 100% 65% Selling price Variable expenses Contribution margin $ 28 35% Fbxed expenses are $76,000 per month and the company is selling 4.600 units per month. References Exercise 5-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume [LO5 4 Section Break 4. 100 points value Exercise 5-5 Part 1 Required 1-a. The marketing manager argues that a $10,000 increase in the monthly advertising budget would increase monthly sales by $25,000 Calculate the increase or decrease in net operating income O Type here to search

Explanation / Answer

Incremental Contribution margin (25,000*35%) = $8,750

Less: Increase in advertising expenditure $10,000

Net operating income decrease by $1,250

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