5. Faxmatic, Inc., produces memory enhancement kits for fax machines. Sales have been very erratic, with some months showing a profit and some months showing a loss. The company's contribution format income statement for the most recent month is given below: Sales (21,500 units at $100 per unit) Variable expenses $2,150,000 290,000 Contribution margin Fixed expenses 860.000 880,000 Net operating loss $ (20,000) Required: 1. Compute the company's CM ratio and its break-even point in both units and dollars. CM ratio Break-even point in units Break-even point in dollars 2. The sales manager feels that a $8,000 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in an $94,000 increase in monthly sales. If the sales manager is right, what will be the effect on the company's monthly net operating income or loss? (Use the incremental approach in preparing your answer.)