Check my work mode : This shows what is correct or incorrect for the work you ha

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Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not ind Required information (The following information applies to the questions displayed below Data for Hermann Corporation are shown below Percent Selling price Variable expensea Contribution margin Fixed expenses are $73,000 per month and the company is selling 4,300 units per month Required: 1-a. The marketing manager argues that a $9,700 increase in the monthly advertising budget would increase monthly sales by $23,500. Calculate the increase or decrease in net operating income 1-b. Should the advertising budget be increased? Answer is not complete. Complete this question by entering your answers in the tabs below Req 1A Req 18 The marketing manager argues that a $9,700 increase in the monthly advertising budget would increase monthly sales by $23,500. Caliculate the increase or decrease in net operating income. (Do not round intermediate calculations) Prev 2of 5 Next >

Explanation / Answer

Answer =1A Current Selling Sales $                           65 Less: Variable Expenses $                           39 Contribution margin $                           26 Contribution margin % 40% Sales increse = $            23,500.00 Less: Contribution Marging 40% of $ 23,500 $                     9,400 Less: Additional Expenses for advertising $                     9,700 Decrease in Net operating income $                       -300 Answer = $                        300 Answer =1 B: No, Advertising budget should not increased becase there is net operating loss of $ 300

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