Due to erratic sales of its sole product a high-capacity battery for laptop computers-PEM. Inc, has been expertering financial difficulty for some time. The company's contribution format income statement for the most recent morth is given below. 320 per unit) Sales (13,500 units Variable expenses Contribution margin Fixed expenses Net operating loss 270, 125 000 135, 19 150,00 (15,000) 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 $6,100 Increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will increase unit sales and the total sales by $89.000 per month. If the president is right, what will be the increase (decreases 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 $31,000 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 $0.50 per unit Assuming no other changes, how many units would have to be sold each month to attain a target profit of $4,200? 5. Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $59,000 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 20.400 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 20.400 units) Complete this question by entering your answers in the tabs below. Req 1 Req Req3 Reg 4 Req 5A Req 5B Reg 5C Compute the company's CM ratio and its break-even point in unit sales and dollar sales. (Do not round int calculations. Round "CM ratio' to the nearest whole percentage (i.e., 0.234 should be entered as "23"). CM ratio % Break-even point in unit sales Break-even point in dollar sales Complete aces Rey 58 Fleq 50 Thea z Req 5A Reg 3 Reg 4 Reg 1 The president believes that a $6,100 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will increase unit sales and the total sales by $89,000 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 Reg 5B Req 50 Reg 2 Reg 4 Req 5A Reg 1 Reg 3 Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of $31,000 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 (ass) Req 5A Req 58 Req 5C Reg 3 Reg 4 Reg 2 Reg 1 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 $0.50 per unit. Assuming no other changes, how many units would have to be sold each month to attain a target profit of $4,200? (Do not round intermediate calculations. Round final answer to the nearest whole unit.) Show less Unit sales to attain target profit Complete Req 5B Reg 5C Peq5A Reg 4 Req3 Reg 1 Reg 2 Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $59,000 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 (i.e., 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 Reqsc Req3 Reg 2 Reg 4 Req5A Reg 58 Req 1 Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, faxed expenses would incre by $59,000 each month. Assume that the company expects to sell 20,400 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 bois as well as in total, for each alternative.) (Do not round your intermediate calculations. Round your percentage answers to the nearest whole number.) Show less Automated Per Unit PEM Inc Contribution Income Statement Not Automated Total Per Unit % % % Total Reg 4 Reg 2 Reg 3 Reg 5A Reg 5B Req 50 Req 1 Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fored expenses would increase by $59,000 each month. Would you recommend that the company automate its operations (Assuming that the company expects to sell 20,400 units)? Yes No