Dog Dandy distributes a dog collar made of wooden beads that sells for $$40$ per unit. Variable expenses are $$20$ per unit, and fixed Required:

Answer each of the following independent questions based on the original data.

What is the product's CM ratio?

CM ratio

Use the CM ratio to determine the break$-$even point in dollar sales.

Break$-$even point in dollar sales

Assume this year's total sales decrease by $$52,800.$ If the fixed expenses do not change, how much will operating income

decrease?

Decrease in operating income What is the degree of operating leverage based on last year's sales?

Note: Round your answer to $1$ decimal place.

Degree of operating leverage

Assume the this year's unit sales will decrease by $20\%$ next year. Using the degree of operating leverage from last year, what

percentage decrease in operating income will the company incur this year?

Decrease in operating income

$6-$a$.$ The sales manager is convinced that a $10\%$ reduction in the selling price, combined with a $$22,800$ increase in advertising, would

increase this year's unit sales by $40\%.$ If the sales manager is right, what would be this year's operating income if his ideas are

implemented?

expenses total $$153,600$ per year. Its operating results for last year were as follows:

Required:

Answer each of the following independent questions based on the original data.