EM, Incorporated, is experiencing financial difficulty due to erratic sales of its only product, a high-capacity battery for laptop computers. The company's contribution format income statement for the most recent month is given below: Required: 1 Compute the company CM rato and its break-even point in unit soles and dollar sales 2 The president believes 0$6,800 increase in the monthly adveitising budget, combined with an intensified effort by the sales staff, Wail increase unit sales and the total sales by $83,000 per month if the president is ight, what will be the increase (decrease) in the company's monthly net operating income? 3. Refer to the original data. The sales manager is corvinced that a 10% reduction in the seling price, combined with an increase of $30,000 in the monthly advertising budget, will double unit sales if the sales manager is right, what wili be the revised net opelating income (loss)? 4. Refer to the onginal date. The Malketing Department thinks that a fancy new package for the laptop computer battery would grow sales. The new packape would increase varibble costs by $070 per unit Assuming no other changes, how many units would have to be sold each month to attain a target profit of $4,400 ? 5. Refer to the orignal data By outomating, the compony could rectuce variable expenses by $3 per unit However, fored expenses would increase by $58,000 eoch month a Compute the new CM rotio and the new break-even point in unit sales and dollar soles. b. Assume the company expects 10 sell 20,900 ints next month Prepare two contribution format income statements, one. assurning operations are not automated and one assuming they are. (Show dato on a per-unit and percentage bosis, as weil as in total for each oliernative.) C. Would you recommend the company automate its operations (Assuming that the company expects to sell 20.900 units)? Comphte this question by entering your onswers in the tabs below. The prea dent believes a $5,800 increase in the monthly advertising budget, combined with an intensified eifort by the sales etaff, will increase unit sales and the total sales by $83,000 per month. If the president is right, what will be the increaso? (decrease) in the company's monthly net operating income? Noteido aot round ntermediate cakulations. Complete this question by entering your answers in the tabs below. Refor to the origina data. The sales manager is convinced that a 10% reduction in the selling price combined with an revised net operating hoome (loss)? Note Lotres hould be entered an a hegative value: Complete this question by entering your answers in the tabs below. Refer to the onginal data. The Marketino Department thinks that a fancy new package for the laptop computer battery would grow Eales, The new package would increase variable costs by $0.70 per unit. Assuming no other changes, how many units woul heve to be sold esch month to atta in a target profit of $4,400 ? Note bo not round intermediate calcalationin. Rotind final answer up to the nearest whole unis. Complete this question by entering your answers in the tabs below. Complete this question by entering your answers in the tabs below. Refec to tho orighal data: By sutomating, the company could reduce variable expenses by $3 per unit. However, fixed expenses woud increase oy $58,000 each month, Assume the company expects to sell 20,900 units next month. Prepare two contribution forma insome statements, one assuming operations are not automated and one assuming they are. (Show data on a per-unit and peccentrpe basis, as wefl as in tota, for each altemative.) Toto Do ho: rourd you inkemectate calculations. Round your percentage answers to the nearest whole number. Sefer to the eficioa data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $58,000 each month. Would you recommend the company automate is operations (Assuming that the company expects to sell 20,900 units)
