1 Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Inc., has been experiencing financial difficulty for some time. The company's contribution format income statement for the most recent month given below: Sales (13,300 units $20 per unit) 266,000 variable expenses 159,600 on margin Ri Frint 12,000 Net operating loss Required: Compute the company's C rauo ai nu break-even point in unit sales and dollar sales. bined with an intensified effort by the sales staff, will result in an $89.000 increase in monthly sales. If the president is right, what will be the increasee (decrease) in the company's monthly net operating income? 3. Refer the orlginal data. The sales manager is convinced that a 10% reduction in the selling price, combined with an Increase of $30,000 in the monthly advertising budget, will double unit sales. If the sales manager is right, what will be the revised net operating 4. Refer the original data. The Marketing Department thinks that a fancy new package for the laptop computer battery would grow sales. The new package would increase packaging costs by 0.50 cents per unit. Assuming no other changes, how many units would have to be sold each month to attaln a target profit of $4,600? 5. Refer to the origi SEE OOy automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses a. Compute the new CM ratio and the new break-even point in unit sales and dollar sales b. Assume that the company expects to sell 20,200 units next month. Prepare two contribution format income statements, one assuming that operatlons are not automated and one assuming that they are. (Show data on a per unit and percentage basis, as well as in total, for each alternative.) c. Would you recommend that the company automate its operations (Assuming that the company expects to sell 20,200)