[The following information applies to the questions displayed below.]

Data for Hermann Corporation are shown below:

Per Unit Percent of Sales
Selling price $ 65 100%
Variable expenses 39 60
Contribution margin $ 26 40%

Fixed expenses are $73,000 per month and the company is selling 4,300 units per month.
Exercise 6-5 (Algo) Part 1

Required:
1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,700, the monthly sales volume increases by 100 units, and the total monthly sales increase by $6,500?
1-b. Should the advertising budget be increased?
The following information applies to the questions displayed below.]

Data for Hermann Corporation are shown below:

Per Unit Percent of Sales
Selling price $ 65 100%
Variable expenses 39 60
Contribution margin $ 26 40%

Fixed expenses are $73,000 per month and the company is selling 4,300 units per month.
Exercise 6-5 (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 $5 per unit and increase unit sales by 25%.
2-b. Should the higher-quality components be used?

Mauro Products distributes a single product, a woven basket whose selling price is $14 per unit and whose variable expense is $10 per unit. The company’s monthly fixed expense is $7,600.

Required:
1. Calculate the company’s break-even point in unit sales.
2. Calculate the company’s break-even point in dollar sales. (Do not round intermediate calculations.)
3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? (Do not round intermediate calculations.)