Due to erratic sales of its sole product- a high-capacity battery for laptop computers- Parma Ltd. has been experiencing difficulty for some time. The company income statement for the most recent month is given below: Sales (19500 units$30) $585 000

Less variable expenses 409 500

Contribution margin.. 175 500

Less fixed expenses. 180 000

Net loss (4 500)

a) Compute the companys CM ratio and its break-even point in both units and dollars.

b) Prepare break even chart for the company using excel spread sheet.

2. a) The president believes that a $ 16 000 increase in the monthly advertising budget combined with an intensified effort by the sales staff, will result in $80 000 increase in monthly sales. If the president is right, what will be the effect on the companys monthly net income or loss?

b) Prepare break even chart using excel to show the new breakeven point