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Due to erratic sales of its sole producta high-capacity battery for laptop computersthe company has been experiencing financial difficulty for some time. The company's contribution
Due to erratic sales of its sole producta high-capacity battery for laptop computersthe company has been experiencing financial difficulty for some time. The company's contribution format income statement for the most recent month is given below: $ Sales (20,500 units X $20 per unit) Variable expenses Contribution margin Fixed expenses Net operating loss 410,000 307,500 102,500 150,000 $ (47,500) 4. Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $36,000 each month. Assuming no other changes, complete the worksheet below and compute the new CM ratio, selling price per unit, new variable expenses per unit, new contribution margin per unit (unit CM), and the new break-even point in unit sales and dollar sales. (3 points) CM ratio % Selling price per unit $ Variable expenses per unit $ $ Contribution margin per unit (unit CM) $ Break-even point in unit sales Break-even point in dollar sales
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