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Required information Exercise 6-7(Algo) Changes in Variable Costs, Fixed Costs, Selling Price, and Unit...

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Accounting

Required information
Exercise 6-7(Algo) Changes in Variable Costs, Fixed Costs, Selling Price, and Unit Sales [LO6-7]
[The following information applies to the questions displayed below.]
Data for Hermann Corporation are shown below:
Fixed expenses are $88,000 per month and the company is selling 3,000 units per month.
Exercise 6-7(Algo) Part 2
2-a. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-
quality components that increase the variable expense by $6 per unit and increase unit sales by 20%.
2-b. Should the higher-quality components be used?
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