1) Due to erratic sales of its sole producta high-capacity battery for laptop computersPEM, Incorporated, has been experiencing financial difficulty for some time. The company's contribution format income statement for the most recent month is given below:

Sales (13,200 units $30 per unit)	$ 396,000
Variable expenses	237,600
Contribution margin	158,400
Fixed expenses	176,400
Net operating loss	$ (18,000)

Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $51,000 each month. Assume that the company expects to sell 21,000 units next month. Prepare two contribution format income statements, one assuming that operations 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.)

Note: Do not round your intermediate calculations. Round your percentage answers to the nearest whole number.

PEM, Incorporated Contribution Income Statement Not Automated Automated Total Per Unit % Total Per Unit % 0 0 0 0 0 0 S 0 0