Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income Required: $2,080,000 1,040,000 1,040,000 180.000 860,000 Answer each question independently based on the original data: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in dollar sales. 3. Assume this year's unit sales and total sales increase by 52,000 units and $4,160,000, respectively. If the fixed expenses do not change, how much will net operating income increase? 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's unit sales to increase by 14%. Using the degree of operating leverage from last year, what percentage increase in net operating income will the company realize this year? 5. The sales manager is convinced that a 15% reduction in the selling price, combined with a $79,000 increase in advertising, would increase this year's unit sales by 25% a. If the sales manager is right, what would be this year's net operating income if his ideas are implemented? b. If the sales manager's ideas are implemented, how much will net operating income increase or decrease over last year? 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $1.90 per unit. He thinks that this move, combined with some increase in advertising, would increase this year's unit sales by 25%. How much could the president increase this year's advertising expense and still earn the same $860,000 net operating income as last year? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4A Reg 40 Req SA Req 58 Req 6 Check m 20 4 2. Use the CM ratio to determine the break-even point in dollar sales 3. Assume this year's unit sales and total sales increase by 52.000 units and $4360,000, respectively if the feed expenses do not change, how much will net operating income increase? 4a. What is the degree of operating leverage based on last years sales 4-b. Assume the president expects this year's unit sales to increase by 14% Using the degree of operating leverage from last yea what percentage increase in net operating income will the company realize this year? 5. The sales manager is convinced that a 15% reduction in the saling price, combined with a $75,000 increase in string would increase this year's unit sales try 25% a if the sales manager is right, what would be this year's net operating income if his ideas are implemerned? b if the sales manager's ideas are implemented, how much will net operating income increase or decrease over last year? 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $1.90 per unit. He thinks that this move, combined with some increase in advertising, would increase this year's unst sales by 25% How much could the president increase this year's advertising expense and still eam the same $860,000 net operating income as last year? Complete this question by entering your answers in the tabs below. Req 1 What is the product's CM ratio? Rec 3 Prex 4 of 4 Next 6 Chuck By work 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's unit sales to increase by 14%. Using the degree of operating leverag what percentage increase in net operating income will the company realize this year? 5. The sales manager is convinced that a 15% reduction in the selling price, combined with a $79,000 increase in a Increase this year's unit sales by 25%. a. If the sales manager is right, what would be this year's net operating income if his ideas are implemented? b. If the sales manager's ideas are implemented, how much will net operating income increase or decrease over 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by thinks that this move, combined with some increase in advertising, would increase this year's unit sales by 25%. Ha president increase this year's advertising expense and still earn the same $860,000 net operating income as last y Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4A Req 48 Req 5A Req 58 Req 6 Use the CM ratio to determine the break-even point in dollar sales. (Do not round intermediate calculations.) Break-even point in dollar sales 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $1.90 per u thinks that this move, combined with some increase in advertising, would increase this year's unit sales by 25%. How much co president increase this year's advertising expense and still earn the same $860,000 net operating income as last year? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4A Req 48 Req 5A Req 5B Req 6 What is the degree of operating leverage based on last year's sales? (Round intermediate calculations and final answers to 2 decimal places.) Degree of operating leverage Req3 Req 48 > Pray 4 of 4 president increase this year's advertising expense and still earn the same $860,000 net operating income as last year? Complete this question by entering your answers in the tabs below. Rea 1 Req 2 Req 3 Req 4A Req 48 Req 5A Req 58 Req 6 Assume the president expects this year's unit sales to increase by 14%. Using the degree of operating leverage from last year, what percentage increase in net operating income will the company realize this year? (Round intermediate calculations and final answer to 2 decimal places.) Net operating income increases by Req 4A Req SA Iwith some increase in advertising, would increase this year's unit sales by 25%. How much coum president increase this year's advertising expense and still earn the same $860,000 net operating income as last year? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4A Req 48 Req 5A Req 58 Req 6 The sales manager is convinced that a 15% reduction in the selling price, combined with a $79,000 increase in advertising, would increase this year's unit sales by 25%. If the sales manager is right, what would be this year's net operating income if his ideas are implemented? (Do not round intermediate calculations.) Net operating income (loss) Req 48 Req 58 > president increase this year's advertising expense and still earn the same $860,000 net operating income as last year? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4A Req 48 Req 5A Req 58 Req 6 The sales manager is convinced that a 15% reduction in the selling price, combined with a $79,000 increase in advertising, would increase this year's unit sales by 25%. If the sales manager's ideas are implemented, how much will net operating income increase or decrease over last year? (Negative amounts should be input with a minus sign.) Increase (decrease) to net operating income