Due to erratic sales of its sole product...

Please answer parts 5A and 5B and show your steps on how you achieved the answers.

4 value: 10.00 points Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Inc., has beern experiencing difficulty for some time. The company's contribution format income statement for the most recent month is given below: Sales (13,500 units x $40 per unit) Variable expenses $540,000 324,000 Contribution margin Fixed expenses 216,000 240,000 Net operating loss $ (24,000) Required 1. Compute the company's CM ratio and its break-even point in both unit sales and dollar sales. 40 % CM ratio Break-even point in units Break-even point in dollars S 15,000 600,000 2. The president believes that a $6,900 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in an $85,000 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 27,100