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 x $20 per unit) Variable expenses Contribution margin Fixed expenses Net operating loss 5 252,000 151,200 100, see 112.800 (12.000) 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 $6,200 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in an $82.000 Increase in monthly sales. 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 $37,000 in the monthly advertising budget will double unit sales. If the sales manager is right, what will be the revised net operating Income (loss)? Next > 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 $6,200 increase in the monthly advertising budget, combined with a staff, will result in an $82,000 increase in monthly sales. If the president is right, what will be the incre monthly net operating income? 3. Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, $37,000 in the monthly advertising budget, will double unit sales. If the sales manager is right, what w income (loss)? 4. Refer to the original data. The Marketing Department thinks that a fancy new package for the laptop sales. The new package would increase packaging costs by $0.80 per unit. Assuming no other chang to be sold each month to attain a target profit of $4.700? 5. Refer to the original data. By automating, the company could reduce variable expenses by $3 per un would increase by $52,000 each month. ratin and the new break-even point in unit sales and dollar sales