Due to erratic sales of its sole producta high-capacity battery for laptop computersthe company has been experiencing financial difficulty for some time. The companys contribution format income statement for the most recent month is given below: Sales (20,500 units $20 per unit) $ 410,000 Variable expenses 307,500 Contribution margin 102,500 Fixed expenses 150,000 Net operating loss $ (47,500 )

Required: 1. Compute the companys CM ratio, selling price per unit, variable expenses per unit, contribution margin per unit (unit CM), and its break-even point in unit sales and dollar sales. (Do not round intermediate calculations.) 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 $

2. The president believes that a $11,000 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will increase unit sales and the total sales by $50,000 per month. If the president is right, what will be the increase (decrease) in the companys monthly net operating income? (Do not round intermediate calculations.) by $

3. 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 $1 per unit. Assuming no other changes, how many units would have to be sold each month to attain a target profit of $9,700? (Do not round intermediate calculations and complete the worksheet below.) Selling price per unit $ Variable expenses per unit $ Contribution margin per unit (unit CM) $ Target profit $ Fixed expenses $ Unit sales to attain target profit

4. Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $33,000 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. 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 $