Due to Erratic sales of its sole procduct- a high capacity battery for laptop computers- PEM, inc has been Experiencing financial difficulty for some time. The company contribution format income statement for the most recent month is given below:

Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Inc., has been experiencing financial difficulty for some time. The company's contribution format income statement for the most recent month is given below: Sales (12,600 units * $30 per unit) Variable expenses Contribution margin Fixed expenses Net operating loss $ 378,000 226,800 151,200 169,200 $ (18.00) Required: 1. Compute the company's CM ratio and its break-even point in unit sales and dollar sales 2. The president believes that a $6,400 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will increase unit sales and the total sales by $82,000 per month. If the president is right, what will be the increase (decrease in the company's monthly net operating income? 3. Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of $38,000 the monthly advertising budget, will double unit sales. If the sales manager is right, what will be the revised net operating income (loss)? 4. Refer to the original data. The Marketing Department thinks that a fancy new package for the laptop computer battery would grow sales. The new package would increase packaging costs by $0.40 per unit. Assuming no other changes, how many units would have to be sold each month to attain a target profit of $4,800? 5. Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses arch O View previou Required: 1 Compute the company's CM ratio and its break-even point in unit sales and dollar sales 2 The president believes that a $6,400 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will increase unit sales and the total sales by $82,000 per month. If the president is right, what will be the increase (decrease) in the company's monthly net operating income? 3. Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of $38,000 in the monthly advertising budget, will double unit sales. If the sales manager is right, what will be the revised net operating income (loss)? 4. Refer to the original data The Marketing Department thinks that a fancy new package for the laptop computer battery would grow sales. The new package would increase packaging costs by $0.40 per unit. Assuming no other changes, how many units would have to be sold each month to attain a target profit of $4,800? 5. Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $55,000 each month a. Compute the new CM ratio and the new break-even point in unit sales and dollar sales b. Assume that the company expects to sell 20,800 units next month Prepare two contribution format income statements, one assuming that operations are not automated and one assuming that they are (Show data on a per unit and percentage basis, as well as in total, for each alternative) c Would you recommend that the company automate its operations (Assuming that the company expects to sell 20,800 units)? Complete this question by entering your answers in the tabs below. Complete this question by entering your answers in the tabs below. - Req 1 Reg 2 Req3 Reg 4 Req SA Req 5B Reg SC Compute the company's CM ratio and its break-even point in unit sales and dollar sales. (Do not round intermediate calculations. Round "CM ratio" to the nearest whole percentage (l.e., 0.234 should be entered as "23"). 40% CM ratio Break-even point in unit sales Break-even point in dollar sales 423,000 14,100 $ Req 2 > View previous y udos de ML GUllde de yuldt ureydi. Uw dapetin e vet, well as in total, for each alternative) c Would you recommend that the company automate its operations (Assuming that the company expects to sell 20,800 units)? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Req 5A Reg 58 Req SC The president believes that a $6,400 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will increase unit sales and the total sales by $82,000 per month. If the president is right, what will be the increase (decrease) in the company's monthly net operating income? (Do not round intermediate calculations.) by . o c View previous assy uit up is die HUL GULUNU I Une by UdL ureydew did it I did peremye asi, well as in total, for each alternative.) Would you recommend that the company automate its operations (Assuming that the company expects to sell 20,800 units)? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req3 Reg 4 Reg SA Req 5B Reg 5C Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of $38,000 in the monthly advertising budget, will double unit sales. If the sales manager is right, what will be the revised net operating income (loss)? (Losses should be entered as a negative value.) Revised net operating income (loss) View previous udupe duis die IU QUEU dnu nemy udrey are now wala vita per un percentage ud well as in total, for each alternative.) c Would you recommend that the company automate its operations (Assuming that the company expects to sell 20,800 units)? Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Reg 3 Reg 4 Req 5A Reg 5B Req 5C Refer to the original data. The Marketing Department thinks that a fancy new package for the laptop computer battery would grow sales. The new package would increase packaging costs by $0.40 per unit. Assuming no other changes, how many units would have to be sold each month to attain a target profit of $4,8007 (Do not round intermediate calculations. Round final answer to the nearest whole unit.) Show less Una sales to attain target profit you recommend that the company automate its operations (Assuming that the company expects to sell 20,800 units)? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Req 5A Req 5B Req 5C Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $55,000 each month. Compute the new CM ratio and the new break-even point in unit sales and dollar sales. (Do not round intermediate calculations. Round "CM ratio" to the nearest whole percentage (ie, 0.234 should be entered as *23") and other answers to the nearest whole number.) Show less CM ratio Break-even point in unit sales Break-even point in dollar sales & Reg4 ReQ5B > search View previous attempt Reg 1 Reg 2 Req3 Reg 4 Req SA Reg 58 Regsc Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $55,000 each month. Assume that the company expects to sell 20,800 units next month. Prepare two contribution format income statements, one assuming that operations are not automated and one assuring that they are. (Show data on a per unit and percentage basis as well as in total, for each alternative.) (Do not round your intermediate calculations, Round your percentage answers to the rest whole number) Show less PEM, Inc. Contribution Income Statement Not Automated Total Per Unit % Automated Per Un Total % % % % 0196 0 $ 0 0 $ 0 5 0 5 0 ch View pre Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req3 Req 4 Req 5A Reg 5B Req 5C Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $55,000 each month. Would you recommend that the company automate its operations (Assuming that the company expects to sell 20,800 units)? OYes ONO