2 5 port P Feather Friends, Inc. distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $180,000 per year Its operating results for last year were as follows Sales Variable expenses Contribution margin Net operating Income $3,160,000 1,000,000 1,000,000 180,000 $ 500,000 Required: Answer each question independently based on the original data 1 What is the product's CM ratio 2. Use the CM ratio to determine the break-even point in dollar sales 3 if this year's sales increase by $52.000 and fixed expenses do not change, how much will net operating income increase 4- What is the degree of operating leverage based on last years sales? 4-b. Assume the president expects this year's sales to increase by 16% Using the degree of operating leverage from last year, what percentage increase in net operating income will the company realize this year? 5 The sales manager is convinced that a 15% reduction in the selling price, combined with a $70.000 increase in advertising, would increase this year's unit sales by 25% a. If the sales manager is night, what would be this year's net operating income if his ideas are amplemented? b if the sales managers ideas are implemented, how much will net operating income increase or decrease over last year? 6 The president does not want to change the selling price, Instead, he wants to increase the sales commission by $180 per unit. He thinks that this move, combined with some increase in advertising, would increase this year's sales by 25% How much could the president increase this year's advertising expense and still earn the same $900.000 net operating income as last year? Complete this question by entering your answers in the tabs below. 1 Red 2 What is the product's CM ratio CM Reg3 Reg 44 Ag40 RSA Reg 50 Reg 6