Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate complete Due to erratic sales of its sole product-a high-capacity battery for laptop computers--PEM, Inc., has been experiencing financial difficulty for some time. The company's contribution format income statement for the most recent month is given below. Sales (12,600 units X $30 per unit) Variable expenses Contribution margin Pixed expenses Net operating loss $ 378,000 189.000 189,000 211,500 $ (22,500) Required: 1. Compute the company's CM ratio and its break-even point in unit sales and dollar sales. 2. The president believes that a $6,900 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in an $89,000 increase in monthly sales. If the president is right, what will be the increase (decrease in the company's monthly net operating income? 3. Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of $39,000 in the monthly advertising budget, will double unit sales. If the sales manager is right, what will be the revised net operate income (loss)? 4. Refer to the original data. The Marketing Department thinks that a fancy new package for the laptop computer battery would grow sales. The new package would increase packaging costs by $0.50 per unit. Assuming no other changes, how many units would have to be sold each month to attain a target profit of $4,600? 5. Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $53,000 each month. a. Compute the new CM ratio and the new break-even point in unit sales and dollar sales. b. Assume that the company expects to sell 20,900 units next month. Prepare two contribution format income statements, one assuming that operations are not automated and one assuming that they are. (Show data on a per unit and percentage basis, as well as in total, for each alternative.) c. Would you recommend that the company automate its operations (Assuming that the company expects to sell 20,900)? Answer is complete but not entirely correct. Comnlete this question by entering your answers in the tabs below U with an intensified effort by th light, what will be the increase (decrease) in the U. Ime sales manager is convinced that a 10% reduction in the selling price, combined with an incr UJ,000 in the monthly advertising budget, will double unit sales. If the sales manager is right, what will be the revised net income (loss)? 4. Refer to the original data. The Marketing Department thinks that a fancy new package for the laptop computer battery wou sales. The new package would increase packaging costs by $0.50 per unit. Assuming no other changes, how many units wo to be sold each month to attain a target profit of $4,600? 5. Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, foxed exp! would increase by $53,000 each month. a. Compute the new CM ratio and the new break-even point in unit sales and dollar sales. b. Assume that the company expects to sell 20,900 units next month. Prepare two contribution format income statements, on assuming that operations are not automated and one assuming that they are. (Show data on a per unit and percentage basis, as in total, for each alternative.) c. Would you recommend that the company automate its operations (Assuming that the company expects to sell 20,900)? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Rea SA Req 5B Req 5C Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an Increase of $39,000 in the monthly advertising budget, will double unit sales. If the sales manager is right, what will be the revised net operating income (loss)? (Losses should be entered as a negative value.) Revised net operating income (loss) 10174.400) Draw of 5 Mayt