4 Feather Friends, Incorporated, distributes a high-quality wooden birdhouse that sells for $120 per unit. Variable expenses are $60.00 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows: 02:01:13 Sales Variable expenses Contribution margin Fixed expenses Net operating income $ 3,120,000 1,560,000 1,560,000 180,000 $ 1,380,000 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. Assume this year's unit sales and total sales increase by 56,000 units and $6,720,000, respectively. If the fixed expenses do not change, how much will net operating income increase? 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's unit 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 12% reduction in the selling price, combined with a $77,000 increase in advertising, would increase this year's unit sales by 25%. a. If the sales manager is right, what would be this year's net operating income if his ideas are implemented? b. If the sales manager's 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 $1.70 per unit. He thinks that this move, combined with some increase in advertising, would increase this year's unit sales by 25%. How much could the president increase this year's advertising expense and still earn the same $1,380,000 net operating income as last year?

Featber Fifends, Incorperated, distributes a high-quaity wooden birdhouso that seps for $120 per unit. Variable experses are $80.00. 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 beesk-evon point in dollar sales: 3. Assume this year's unit sales and total sales increase by 56,000 units and $6.720,000, respectively. If the foxed expenses do not change, how much will net operating income increase? 4-a What is the degree of operating leverage based on last year's sales? 4-6. Assume the president expects this year's unit stoles to increase by 16%. Using the degree of operating leverage from last year, what porcentace increase in net operating income will the compary realize this year? 5. The sales manager is comvinced that a 12% reduction in the selling price, combined with a 577,000 increase in advertising. would Increase thits year's unit sales by 25 in. o. If the salgs manager is right, what would be this year's not operating income if his ldeos are implemented? b. If the sales managers ideos are implemented, how much will net operating income increase or decrease over last year? 6. The president does not want to change the seling price, Instead, he wants to increase the sales commlssion by st.70 per unhit. He thinks that this move, combined with some increase in advertising. wouid increase this years unit sales by 25%. How much could the pregideht increase this year's advertising expense and still earn the same $1,380,000 net operating income as iast year? 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by thinks that this move, combined with some increase in advertising, would increase this year's unit sales by 25%. How muc president increase this year's advertising expense and still earn the same $1,380,000 net operating income as last year? Complete this question by entering your answers in the tabs below. Use the CM ratio to deteAnine the break-even point in dollar sales. (Do not round intermediate calculations.) Assume this year's unit sales and total sales increase by 56,000 units and $6,720,000, respectively. If the fixed expen not change, how much will net operating income increase? (Do not round intermediate calculations.) president increase this year's advertising expense and still earn the same Complete this question by entering your answers in the tabs below. What is the degree of operating leverage based on last year's sales? (Round intermediate calculations and final a decimal places.) Complete this question by entering your answers in the tabs below. Assume the president expects this year's unit sales to increase by 16%. Using the degree of operating leverage from fhal answer to 2 decimal places.) Complete this question by entering your answers in the tabs below. The sales manager is convinced that a 12% reduction in the selling price, combined with a $77,000 increase in advertising, his ideas are implemented? (Do not round intermediate calculations.) hise increase this year's unit sales by 25%. a. If the sales manager is right, what would be this year's net operating income if his ideas are implemented? b. If the sales manager's ideas are implemented, how much will net operating income increase or decrease over last yea 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $1.70 thinks that this move, combined with some increase in advertising, would increase this year's unit sales by 25%. How much president increase this year's advertising expense and still earn the same $1,380,000 net operating income as last year? Complete this question by entering your answers in the tabs below. The sales manager is convinced that a 12% reduction in the selling price, combined with a $77,000 increase in advertising, would increase this year's unit sales by 25%. If the sales manager's ideas are implemented, how much will net operating income increase or decrease over last year? (Negative amounts should be input with a minus sign.) Complete this question by entering your answers in the tabs below. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $1.70 per unit. He thinks that this move, combined with some increase in advertising, would increase this year's unit saies by 25%, How much could the president increase this year's advertising expense and still earn the 5ame$1,380,000 net operating income as last year? (Do not round intermediate calcufations.)