Check my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not indicate Seved Feather Friends, Inc., distributes a high quality wooden birdhouse that sells for $120 per unit Variable expenses are $60.00 per unit and fixed expenses total $160,000 per year its operating results for last year were as follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income $ 3,360,000 1,680,000 1,680,000 160,000 $1,520,000 Required: Answer each question independently based on the ongmal data 1. What is the product's CM ratio 2. Use the CM ratio to determine the break even point in dollar sales 3. If this year's sales increase by $59.000 and fixed expenses do not change how much wil net operating income increase? 4-a. What is the degree of operating leverage based on last year's sales? 4.b. Assume the president expects this year's sales to use 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 13% reduction in the selling price, combined with a $69.000 increase in advertising, would increase this year's unit sales by 25% a. If the sales manager is right, what would be this year's net operating income if his ideas are implemented? b. If the sales manager's ideas are implemented, 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 $150 per unit. He thinks that this move, combined with some increase in advertising, would increase this year's soles by 25% How much could the president increase this year's advertising expense and still earn the same $1.520.000 net operating income as last year? Answer is not complete. Next Prex 2 of 2 !!! Next change, how much will net operating income increase? rating leverage based on last year's sales? percentage increase in net operating income will the company realize this year? president expects this year's sales to increase by 12%. Using the degree of operating leverage from last year, what 5. The sales manager is convinced that a 13% reduction in the selling price combined with a $69,000 increase in advertising. would increase this year's unit sales by 25% a. If the sales manager is right, what would be this year's net operating income if his ideas are implemented? b. If the sales manager's ideas are implemented, 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 $150 per unit. He thinks that this move, combined with some increase in advertising, would increase this year's sales by 25%. How much could the president increase this year's advertising expense and still earn the same $1.520,000 net operating income as last year? Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1 Req2 Req3 Red Reg 40 ReqSA Red 50 R5 The sales manager is convinced that a 13% reduction in the selling price, combined with a $69,000 increase in advertising, would increase this year's unit sales by 25% If the sales manager's dons are implemented, how much will niet operating income increase or decrease over last year? (Negative amounts should be input with a mus sion. Increase (decrease) tonet operating income Next