1.

Frieden Company's contribution format income statement for the most recent month is given below:

Sales (46,000 units)	$	966,000
Variable expenses		676,200
Contribution margin		289,800
Fixed expenses		231,840
Net operating income	$	57,960

Refer to the original data. Rather than purchase new equipment, the marketing manager argues that the companys marketing strategy should be changed. Instead of paying sales commissions, which are included in variable expenses, the marketing manager suggests that salespersons be paid fixed salaries and that the company invest heavily in advertising. The marketing manager claims that this new approach would increase unit sales by 50% without any change in selling price; the companys new monthly fixed expenses would be $289,800; and its net operating income would increase by 25%. Compute the break-even point in dollar sales for the company under the new marketing strategy.(Omit the "$" sign in your response.)

New break even point in dollar sales

$

2.

.	Refer to the original data. By automating, the company could slash its variable expenses in half. However, fixed costs would increase by $121,000 per month.

a.	Compute the new CM ratio and the new break-even point in both units and dollars.(Do not round intermediate calculations. Round your final answers to the nearest whole number. Omit the "%" and "$" signs in your response.)

CM ratio	%
Break-even point in units
Break-even point in dollars	$

b.	Assume that the company expects to sell 20,100 units next month. Prepare two contribution format income statements, one assuming that operations are not automated and one assuming that they are.(Omit the "$" and "%" signs in your response.)

Please give a detailed answer.

Thank you!