Due to erratic sales of its sole producta high-capacity battery for laptop computersPEM, Incorporated, has been experiencing financial difficulty for some time. The companys contribution format income statement for the most recent month is given below:

Sales (19,500 units $30 per unit)	$ 585,000
Variable expenses	409,500
Contribution margin	175,500
Fixed expenses	180,000
Net operating loss	$ (4,500)

b. Assume that the company expects to sell 26,000 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.)

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 75 cents per unit. Assuming no other changes, how many units would have to be sold each month to attain a target profit of $9,750?

\begin{tabular}{|c|c|c|c|c|c|c|c|c|} \hline \multicolumn{9}{|c|}{ PEM, Incorporated } \\ \hline \multicolumn{9}{|c|}{ Contribution Income Statement } \\ \hline & & \multicolumn{4}{|c|}{ Not Automated } & \multicolumn{3}{|c|}{ Automated } \\ \hline & & & Total & \begin{tabular}{l} Per \\ Unit \end{tabular} & % & Total & \begin{tabular}{l} Per \\ Unit \end{tabular} & % \\ \hline Sales & & $ & 402,000x & 30 & & & & x \\ \hline & & & x & & & & & \\ \hline & & & 402,000 & 30 & 0 & 0 & $ & 0 \\ \hline & & & & & & & & \\ \hline & & $ & 402,000 & & & $ & & \\ \hline \end{tabular}