Contribution margin... Fixed expenses... Net operating income... PART A (19 marks) - Hernandez Company, maker of high-quality flashlights, has experienced steady growth over the last 6 years. The company's accountant has presented CEO, Mr. Hernandez with the following data for the current year 2018. Sales (20,000 flashlights at $ 25 per unit).. Variable expenses.. $500,000 300,000 200,000 185,000 $15,000 Required: 1. Compute the company's contribution margin (CM) ratio. (3 marks) 2. Compute the company's break-even point in both units and dollars. (5 marks) 3. Compute the sales dollars required to earn net income of $125,000. (4 marks) 4. Compute the margin of safety in dollars. (2 marks) 5. Refer to the original data for 2018 in the above table. Mr. Hernandez feels that an $8,000 increase in the advertising budget will result in a $70,000 increase in sales. What will the new contribution format income statement look like if these changes are adopted? (5 marks)