Chapter 05 HW e 4 Feather Friends, Inc. distributes a high quality wooden badhouse that sells for $40 per unit. Variable expenses are $20.00 per unit and find expenses total $100,000 per year its operating results for last year were as follows Sales Contribution orgin Flood expenses t operating Income Required Awwer each question independently based on the original data 1 What is the products CM? 2. Use the CM rabo to determine the break even point in dotar sales 3 Assume this year's unit sales and total sales increase by 55.000 units and $2.200.000, respectively if the feed expenses do not change, how much will net operating income increase 44 What is the degree of operating leverage based on last year's sales 40. Assume the president expects this year's unit sales to increase by 12% Using the degree of operating leverage from last year what percentage increase in net operating income will the company realize this year? 5. The sales manager is convinced that a 1% reduction in the selling price, combined with a $79.000 increase in advertising, would increase this year's unit sales by 25% the sales manager is right, what would be this year's net operating income if his ideas are implemented? bf the sales manager's ideas are amplemented, how much will net 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 $1.90 per unt. He thinks that this move, combined with some increase in advertising, would increase this year's unt sales by 25% How much could the president increase this year's advertising expense and still earn the same $340,000 net operating income as last year? Complete this question by entering your answers in the tobs below. Heg 2 Red 3 The messiest does outward to change the lion ca 45 Rea SA Reg Reg