Dog Dandy distributes a dog collar made of wooden beads that sells for $40 per unit. Variable expenses are $20 per unit, and fixed expenses total $144,000 per year. Its operating results for last year were as follows: Sales $480,000 Variable expenses 240,000 Contribution margin 240,000 Fixed expenses 144,000 Operating income 13 96,000 I Required: Answer each of the following independent questions based on the original data. 1. What is the product's CM ratio? -% 2. Use the CM ratio to determine the breakeven point in dollar sales. 3. Assume this year's unit sales and total sales decrease by $52,000. lfthe fixed expenses do not change, how much will operating income decrease? 4. What is the degree of operating leverage based on last year's sales? (Round your answer to 1 decimal place.) 5. 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? % 6a. The sales manager is convinced that a 10% reduction in the selling price, combined with a $22,000 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? 6-b. Do you recommend implementing the sales manager's suggestions? 0 Yes ONO