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 (12,700 units x $30 per unit) Variable expenses Contribution margin Fixed expenses Net operating loss $381,000 228.600 152.400 170.400 $(18,000) 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 $6,600 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? 3. Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of $39,000 in the monthly advertising budget, will double unit sales. If the sales manager is right, what will be the revised net operating sales. The new package would increase packaging costs by $0.70 per unit Assuming no other changes, how many units would have to be sold each month to attain a target profit of $4,300? 5 Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit However, fixed expenses would increase by $59.000 each month. a Compute the new CM ratio and the new break even point in unit sales and dollar sales b. Assume that the company expects to sell 20.700 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) c. Would you recommend that the company automate its operations (Assuming that the company expects to sell 20,700)? assuming that operations are not automated and one assuming that they are. (Show data on a per unit and percentage basis, as we as In total, for each alternative.) c. Would you recommend that the company automate its operations (Assuming that the company expects to sell 20700)? Complete this question by entering your answers in the tabs below. Reg 1 Req 2 Reg 3 Req 5A Req 5B Req 5C The president believes that a $6,600 increase in the monthly advertising budget, combined with an intensified effort by the the company's monthly net operating income? (Do not round Intermediate calculations.) increases by (Reg 1 Reg 3 > would increase by $59,000 each month. a. Compute the new CM ratio and the new break-even point in unit sales and dollar sales b Assume that the company expects to sell 20.700 units next month. Prepare two contribution format income statements, or assuming that operations are not automated and one assuming that they are. (Show data on a per unit and percentage basis as in total, for each alternative.) c. Would you recommend that the company automate its operations (Assurning that the company expects to sell 20.700)? Complete this question by entering your answers in the tabs below. Reg 1 Req 2 Req 4 Req 5A Req 5B Req 5C Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an Increase of $39,000 in the monthly advertising budget, will double unit sales. If the sales manager is right, what will be the revised net operating income (loss)? (Losses should be entered as a negative value.) Revised net operating income (loss) would increase by $59,000 each month. a Compute the new CM ratio and the new break even point in unit sales and dollar sales b. Assume that the company expects to sell 20,700 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 in total, for each alternative.) c. Would you recommend that the company automate its operations (Assuming that the company expects to sell 20,700)? Complete this question by entering your answers in the tabs below. Req 4 Req 1 Req 2 Reg 4 Req SA Req 5B Req 5C grow sales. The new package would increase packaging costs by $0.70 per unit. Assuming no other changes, how many units would have to be sold each month to attain a target profit of $4,3007 (Do not round Intermediate calculations, Round final answer to the nearest whole unit.) Show less Unit sales to attain target profit a. Compute the new CM ratio and the new break-even point in unit sales and dollar sales b. Assume that the company expects to sell 20,700 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, al as in total, for each alternative.) c. Would you recommend that the company automate its operations (Assuming that the company expects to sell 20,700)? Complete this question by entering your answers in the tabs below. ook Tint Req1 Req 2 Req3 Req 4 Req sa Req 5B Req 5C Fences Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $59,000 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 (.e., 0.234 should be entered as "23") and other answers to the nearest whole number.) Show less CM ratio Break-even point in unit sales Break-even point in dollar sales Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 4 Req SA Rec SB Req 5C OS Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $59,000 each month. Assume that the company expects to sell 20,700 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 Sales 0 S Variable expenses Contribution margin Fixed expenses Net operating income $ 0 Req6A Req5C >