bled: OOC - MH Lab 2: Cost-Volume-Profit i Saved Frieden Company's contribution format income statement for the most recent month is given below: Sales (47,000 units) Variable expenses Contribution margin Fixed expenses Net operating income $1,316,000 921,200 394,800 315,840 $ 78,960 The industry in which Frieden Company operates is quite sensitive to cyclical movements in the economy. Thus, profits vary considerably from year to year according to general economic conditions. The company has a large amount of unused capacity and is studying ways of improving profits. Required: 1. New equipment has come on the market that would allow Frieden Company to automate a portion of its operations. Variable expenses would be reduced by $8.40 per unit. However, fixed expenses would increase to a total of $710,640 each month. Prepare two contribution format income statements: one showing present operations, and one showing how operations would appear if the new equipment were purchased. (Input all amounts as positive values except losses which should be indicated by minus sign. Round your "Per unit" answers to 2 decimal places.) Amount Present Per Unit Percentage Amount Proposed Per Unit Percentage % % % % 0 $ 0.00 0% 0 $ 0.00 0% $ 0 $ 0 Help Sav 2. Refer to the income statements in Requirement (1) above. For both present operations and the proposed new operations, Compute: a. The degree of operating leverage. 54 Degree of operating leverage Present Proposed b. The break-even point in dollars. Dollar sales to breakeven Present Proposed c. The margin of safety in both dollar and percentage terms. Margin of safety in dollars Margin of safety in percentage Present % Proposed % 3. Refer again to the data in Requirement (1) above. As a manager, what factor would be paramount in your mind in deciding whether Prov E O