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: Reg 1 Reg 2 Reg 3 Reg 4 Reg SA Req 5B Reg 5C 195.000 Sales (13.500 units X $20 per unit) Variable expenses Contribution margin Fixed expenses Net operating loss $ 270.000 735.000 150.000 $ (15.000) The president believes that a $6,100 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in an $89,000 increase in monthly sales. If the president is right, what will be the increase (decrease) in the company's monthly net operating income? (Do not round intermediate calculations.) Decreases Required: Reg 1 Reg 2 Reg 3 Reg 4 Reg SA Reg 5B 1. Compute the company's CM ratio and its break-even point in unit sales and dollar sales Reg SC 2. The president believes that a $6.100 increase in the monthly advertising budget, combined with an intensified effort by the sales staff will result in an $89.000 increase in monthly sales. If the president is right, what will be the increase (decrease) in the company's Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an monthly net operating income? increase of $37,000 in the monthly advertising budget, will double unit sales. If the sales manager is right, what will be the 3. Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of revised net operating income (loss)? (Losses should be entered as a negative value.) $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)? 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 S0.60 per unit. Assuming no other changes, how many units would have Reg 1 Reg 2 Reg 3 Reg 4 Reg SA Req SB Reg 5C to be sold each month to attain a target profit of $4,200? 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, Refer to the original data. The Marketing Department thinks that a fancy new package for the laptop computer battery would a. Compute the new CM ratio and the new break-even point in unit sales and dollar sales grow sales. The new package would increase packaging costs by $0.60 per unit. Assuming no other changes, how many units b. Assume that the company expects to sell 20.300 units next month. Prepare two contribution format income statements, one would have to be sold each month to attain a target profit of $4,200? (Do not round intermediate calculations. Round final assuming that operations are not automated and one assuming that they are. (Show data on a per unit and percentage basis, as well answer to the nearest whole unit.) as in total, for each alternative.) Show lessa! c. Would you recommend that the company automate its operations (Assuming that the company expects to sell 20.300) Unit sales to attain target profit Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reg SA Reg 5B Reg 5C Reg 1 Reg 2 Reg 3 Reg 4 Reg 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. 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 (i.e., 0.234 should be entered as "23") and other answers to the nearest whole number.) Show less 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 (i.e., 0.234 should be entered as "23").) CM ratio Break-even point in unit sales CM ratio Break-even point in unit sales Break-even point in dollar sales Break-even point in dollar sales Reg 1 Reg 2 Reg SA Reg 58 Rea SC 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. Assume that the company expects to sell 20.300 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.) (Do not round your intermediate calculations. Round your percentage answers to the nearest whole number) Show less PEM, Inc. Contribution Income Statement Not Automated Total Per Unit % Automated Per Unit Total % 0 $ 0 0 % 0 % 0 $ 0 $ 0