Basic CVP Concepts Katayama Company produces a variety of products. One division makes neoprene wetsuits. The division's projected income statement for the coming year is as follows: Sales (65,000 units) $15,600,000 Less: Variable expenses 8,736,000 Contribution margin $6,864,000 Less: Fixed expenses 4,012,000 Operating income $2,852,000 Required: Question Content Area 1. Compute the contribution margin per unit, and calculate the break-even point in units. Round unit contribution margin to the nearest cent and break-even point to the nearest whole unit. Unit contribution margin $fill in the blank e57f35fc0075f80_1 Break-even point fill in the blank e57f35fc0075f80_2 units Compute the contribution margin ratio and the break-even point in dollars. Enter the contribution margin ratio as a decimal value rounded to two decimal places, and use this rounded value in the second calculation. Contribution margin ratio fill in the blank e57f35fc0075f80_3 Break-even point (rounded to the nearest dollar) $fill in the blank e57f35fc0075f80_4 2. The divisional manager has decided to increase the advertising budget by $140,000 and cut the average selling price to $200. These actions will increase sales revenues by $1 million. Will this improve the division's financial situation? Question Content Area Prepare a new income statement to support your answer. In your calculations, round the variable cost ratio to three decimal places. blank Katayama Company Income Statement $- Select - - Select - $- Select - - Select - $- Select - Question Content Area 3. Suppose sales revenues exceed the estimated amount on the income statement by $612,000. Without preparing a new income statement, determine by how much profits are underestimated. $fill in the blank 9eed5502c032ff6_1 4. How many units must be sold to earn an after-tax profit of $1.254 million? Assume a tax rate of 34 percent. Round your answer to the nearest whole unit. fill in the blank 9eed5502c032ff6_2 units 5. Compute the margin of safety in dollars based on the given income statement. Round your answer to the nearest dollar. $fill in the blank 9eed5502c032ff6_3 6. Compute the operating leverage based on the given income statement. Round your answer to three decimal places. Use the rounded answer in the subsequent computation. fill in the blank 9eed5502c032ff6_4 If sales revenues are 20 percent greater than expected, what is the percentage increase in profits? Round the percentage to two decimal places. fill in the blank 9eed5502c032ff6_5 % Check My Work