5 Feather Friends inc. distributes a high-quality wooden birdhouse that sells for $120 per unit Variable expenses are 560.00 per unit. and food expenses total $100.000 per year. Its operating results for last year were as follows: 10 Sales variable expenses Contribution margin Fixed expenses Net operating income $ 2,800,000 1,440,000 1,440.000 180.000 3 1,260,000 Required: Answer each question independently based on the originaldate 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 41.000 units and $4.920,000. 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? 46. Assume the president expects this year's unit sales to increase by 19% Using the degree of operating leverage from last year what percentage increase in not operating income will the company realize this year? 5. The sales manager is convinced that a 12% reduction in the setting price.combined with a $61,000 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 not 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 $2.40 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 $1,260,000 net operating income as last year