Due to erratic sales of its sole product a high-capacity battery for laptop computers-PEM, Inc., has been experiencing difficulty for some time. The companys contribution format income statement for the most recent month is given below: Sales (13,200 units x $40 per unit) $528,000 264,000 Variable expenses 264.000 Contribution margin 294,000 Fixed expenses Net operating loss (30,000) Required: 1. Compute the company's CM ratio and its break-even point in both unit sales and dollar sales. 50% CM ratio Break-even point in units 14,700 Break-even point in s 588,000 dollars 2. The president believes that a $6,100 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in an $86,000 increase in monthly sales. If the president is right, what will be the effect on the company's monthly net operating income or loss? (Use the incremental approach in preparing your answer.) increases