erms. putc the commpany smargin of safe 5. What is the company's CM ratio? If sales increase by s50.000 per month and there is iRed expenses, by how much would you expect monthly net operating income to incr cha aconn PROBLEM 6-19 Break-Even Analysis; Pricing LO6-1, LO6-4, LO6-5 Minden Company introduced a new product last year for which it is trying to find an optimal selling price Marketing studies suggest that the company can increase sales by 5,000 units for e ach $2 reduction in the selling price. The company's present selling price is $70 per unit, and variable expenses are unit. Fixed expenses are $540,000 per year. The present annual sales volume (at the $70 selling price) is 15,000 units. Required 1. What is the present yearly net operating income or loss? 2. What is the present break-even point in unit sales and in dollar sales? 3. Assuming that the marketing studies are correct, what is the maximum annual profit that the company can earn? At how many units and at what selling price per unit would the company generate this profit? What would be the break-even point in unit sales and in dollar sales using the selling price you determined in (3) above (e.g., the selling price at the level of maximum profits)? Why is this break- even point different from the break-even point you computed in (2) above? 4. PROBLEM 6-20 CVP Applications: Break-Even Analysis; Cost Structure; Target Sales LO6-1, 06-3,L06-4, L06-5, LOG-6, LO6_8 Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high totaling $15 per ball, of which 60% is direct labor cost