5. Refer to the original data. By automating, the company could slash its variable expenses in half. However, fixed costs would increase by $45,000 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 "Contribution Margin Ratio" to 2 decimal places.) 62.501 % Contribution margin ratio Break-even point in units Break-even point in dollars b. Assume that the company expects to sell 25,000 units next month. Prepare two contribution format income statements: one assuming that operations are not automated, and one assuming that they are. (Do not round intermediate calculations. Round "Per Unit" and "Percentage" to 2 decimal places.) Comparative Income Statements Not Automated Automated Total Per Unit Percentage Total Per Unit Percentage Sales Less: Variable expenses Contribution margin Less: Fixed expenses Net operating income Memofax, Inc. produces memory enhancement software for computers. Sales have been very erratic, with some months showing a profit and some months showing a loss. The company's contribution forma income statement for the most recent month is given below: Sales (17,000 units at $24 per unit) Less: Variable expenses $408,000 306,000 Contribution margin Less: Fixed expenses 102,000 108,000 Net operating loss $ (6,000) Required: 1. Compute the company's CM ratio and its break-even point in both units and dollars. 251 % Contribution margin ratio Break-even point in units Break-even point in 18,000 $ 432,000 dollars