ezto.mheducation.com Chapter 5 Homework Chapter 5 Homework Chapter 5 Homework Ch

Question

ezto.mheducation.com Chapter 5 Homework Chapter 5 Homework Chapter 5 Homework Chegg Study Guided Solutions a 1.96 in percent- Google Search Data for Hermann Corporation are shown below: Per Unit $ 70 49 Percent of Sales 100% 70% Selling price Variable expenses Contribution margin $ 21 30% Fixed expenses are $74,000 per month and the company is selling 4,400 units per month. 2. Required information 10.00 points Required: 1-a. The marketing manager argues that a $9,800 increase in the monthly advertising budget would increase monthly sales by $24,000. Calculate the increase or decrease in net operating income income 1-b. Should the advertising budget be increased? Yes No Hints References eBook &Resources;

Explanation / Answer

1a) Change in net operating income = (24000*30%)-9800 = -2600

Net operating income decrease by 2600

1b) No

2a) Present contribution margin = 4400*21 = 92400

Proposed contribution margin = (4400*125%)*17 = 93500

Total contribution margin increase by $1100

2b) Yes

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