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 (13,400 units X $20 per unit) Variable expenses Contribution margin Fixed expenses $268, eee 160,800 107,200 119,200 $(12,000) Net operating loss 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 $6,700 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 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 $33,000 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 0.70 cents 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 $51,000 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 20,300 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 20.300)? Rerences Reg 1 Reg 2 Req 4 Req 5A Req 5B Req 5C 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 (1.e., 0.234 should be entered as "23").) CM ratio Break-even point in unit sales Break-even point in dollar salos Complete this question by entering your answers in the tabs below. RSC Reg Reus The president believes that a 56,700 Increase in the monthly advertising budget, combined with an intensified effort by the sales tat will result in an $80,000 increase in monthly sales of the president is right, who will be the increase (decrease in the company's monthly net operating income? (Do not found intermediate calculations) Complete this question by entering your answers in the tabs below. Re Reg4 ReSA RORSC Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of $33,000 in the monthly advertising budget, will delenit sales. If the sales manager is right, what will be the revised net operating income foss)? (Losses should be entered as a negative value) Remed net operating income Reg2 Reg4 > Complete this question by entering your answers in the tabs below. Reg 5 Req Regi Reg 2 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 70 cents per unit. Assuming no other changes, how many units would have to be sold each month to attain a target profit of $4.2007 D ot Found intermediate calculation Round final answer to the nearest whole unit) Un sales to an target pro Req> ReSA) Complete this question by entering your answers in the tabs below. Rest Reg 2 Reg 3 Reg 4 I Reg SA Reg 5 Reg 5C Refer to the original data By automating the company reduce variable expenses by $3 per unit. However, foed expenses would increase by $51,000 each month Compute the new CM ratio and the new break-even point in unit sales and dollar sales. (Do not found intermediate calculations. Round "CH ratio to the nearest whole percentage ( 0.234 should be entered as "23") and other answers to the nearest whole number) Show less Break even point in una Break even point in d a s Complete this question by entering your answers in the tabs below. Reg 5C Res 4 ROSA Re2 Real Red) Refer to the original data. By automatin the company could reduce variable expenses by $3 per unit. However, fed expenses would increase by $51.000 each month. Assume that the company expects to sell 20, 100 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) (Do not round your intermediate calculations. Round your percentage answers to the nearest whole number) PEM, Inc Contribution Income Statement Not Automated Total Per Unt Automated Per Unit Total OS 0S 0 (NBA Res> Complete this question by entering your answers in the tabs below RegSA Rey 50 Refer to the original data By automate the c expere increase by $51.000 each month W Asuming the acts to 001 o uld reduce expensesbyer However, fired o recommend that the company mates o s (Mega