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 (12,600 units * $30 per unit) Variable expenses Contribution margin Fixed expenses Net operating loss $ 378,000 226,800 151,200 169,200 $ (18,000) 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 $6,800 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will increase unit sales and the total sales by $84,000 per month. 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 per unit. Assuming no other changes, how many units would have to be sold each month to attain a target profit of $4,400? 5. Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $56,000 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)? 4. Refer to the original data. The Marketing Department thinks that a fancy new package for the laptop computer batte sales. The new package would increase packaging costs by $0.70 per unit. Assuming no other changes, how many ur to be sold each month to attain a target profit of $4,400? 5. Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fix would increase by $56,000 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 state assuming that operations are not automated and one assuming that they are. (Show data on a per unit and percent well as in total, for each alternative.) c. Would you recommend that the company automate its operations (Assuming that the company expects to sell 2 Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req3 Reg 4 Req SA Req 5B Reg 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 sales Reg 1 Req 2 > 4. Refer to the original data. The Marketing Department thinks that a fancy new package for the laptop compute sales. The new package would increase packaging costs by $0.70 per unit. Assuming no other changes, how m to be sold each month to attain a target profit of $4,400? 5. Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. Howe would increase by $56,000 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 incom assuming that operations are not automated and one assuming that they are. (Show data on a per unit and well as in total, for each alternative.) c. Would you recommend that the company automate its operations (Assuming that the company expects to Complete this question by entering your answers in the tabs below. Reg 1 Req 2 Reg 3 Reg 4 Req 5A Req 5B Req 5C The president believes that a $6,800 increase in the monthly advertising budget, combined with an intensified effom sales staff, will increase unit sales and the total sales by $84,000 per month. If the president is right, what will be increase (decrease) in the company's monthly net operating income? (Do not round intermediate calculations.) by 4. Refer to the original data. ine Marketing Department thinks that a fancy new package for the laptop compute sales. The new package would increase packaging costs by $0.70 per unit. Assuming no other changes, how m to be sold each month to attain a target profit of $4,400? 5. Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. Howe would increase by $56,000 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 incom assuming that operations are not automated and one assuming that they are. (Show data on a per unit and well as in total, for each alternative.) c. Would you recommend that the company automate its operations (Assuming that the company expects to Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req3 Reg 4 Req 5A Req 5B Req 5C Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with increase of $33,000 in the monthly advertising budget, will double unit sales. If the sales manager is right, what w revised net operating income (loss)? (Losses should be entered as a negative value.) Revised net operating income (loss) Req 2 Reg 4 > 4. Refer to the original data. I ne Marketing Department thinks that a fancy new package for the laptop computer sales. The new package would increase packaging costs by $0.70 per unit. Assuming no other changes, how ma to be sold each month to attain a target profit of $4,400? 5. Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. Howev would increase by $56,000 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 assuming that operations are not automated and one assuming that they are. (Show data on a per unit and pe well as in total, for each alternative.) c. Would you recommend that the company automate its operations (Assuming that the company expects to Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Reg 3 Reg 4 Req 5A Req 5B Req 5C Refer to the original data. The Marketing Department thinks that a fancy new package for the laptop computer batte grow sales. The new package would increase packaging costs by $0.70 per unit. Assuming no other changes, how m would have to be sold each month to attain a target profit of $4,400? (Do not round intermediate calculations. Roum answer to the nearest whole unit.) Sh. Unit sales to attain target profit Req3 Req 5A 4. Refer to the orginal data. The Marketing Department thinks that a fancy new package for the laptop computer battery sales. The new package would increase packaging costs by $0.70 per unit. Assuming no other changes, how many units to be sold each month to attain a target profit of $4,400? 5. Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed would increase by $56,000 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 statem assuming that operations are not automated and one assuming that they are. (Show data on a per unit and percentag well as in total, for each alternative.) c. Would you recommend that the company automate its operations (Assuming that the company expects to sell 20,4 Complete this question by entering your answers in the tabs below. Reg 1 Req 2 Reg 3 Req 4 Rea SA Req 5B Req 5C Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $56,000 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 (.e., 0.234 should 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 to be sold each monun to attain a target prolt OI $4,400! 5. Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fix would increase by $56,000 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 state assuming that operations are not automated and one assuming that they are. (Show data on a per unit and percent well as in total, for each alternative.) c. Would you recommend that the company automate its operations (Assuming that the company expects to sell 2 Complete this question by entering your answers in the tabs below. Reg 1 Req 2 Reg 3 Req 4 Req 5A Reg 5B Reg 5C Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $56,000 each month. Would you recommend that the company automate its operations (Assuming that the company expects to sell 20,400 units)? OYes Ono