Cost Volume Profit Relationship Assignment Question 1 Feather Friends Inc. makes a high-quality wooden birdhouse that sells for $20 per unit. Variable costs are $8 per unit, and fixed costs total $180,000 per year. Required: 1) What is the product's CM ratio? 2) Use the CM ratio to determine the break-even point in sales dollars. 3) Due to an increase in demand, the company estimates that sales will increase by $75,000 during the next year. By how much should next income increase or net loss decrease) assuming that fixed costs do not change? 4) Assume that the operating results for last year were as follows: Sales: $400,000 Less: Variable expenses: 160,000 Contribution Margin: 240,000 Less: Fixed expenses: 180,000 Net income: $60,000 The president expects sales to increase by 20% next year. By what percentage should net income Increase