5-a. Refer to the original data. Assume that the company sold 34,000 units last year. The sales manager is convinced that a 9% reduction in the selling price, combined with a $136,000 Increase in advertising expenditures, would increase su unit sales by 40%. Prepare two contribution format income statements: one showing the results of last year's operations, and one showing what the results of operations would be if these changes were made. (Do not round Intermediate calculations. Round "Per Unit" awers to 2 decimal places Sales 5-b. Would you recommend that the company do as the sales manager suggests? Yes No Stratford Company distributes a lightweight lawn chair that sells for $40 per unit. Variable expenses are 25% of sales, and flwed expenses total $768,000 annually Required: Answer the following independent questions: 1. What is the product's CM per unit? 2. Use the CM per unit to determine the break-even point in units. 3. The company estimates that sales will increase by $65.000 during the coming year due to increased demand. By how much should net operating income increase? Increase in operating income MacBook Pro 4. Assume that the operating results for last year were as follows: Sales Lassi Variable expenses Contribution margin Le Fixed expenses Het operating income $1,280,000 320,000 960,000 768,000 192,000 a. Compute the degree of operating leverage at the current level of sales. (Round your answer to 1 decimal place.) b. The president expects sales to increase by 40% next year. By how much should net operating income increase? non operating incomo