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 $160,000 per year. Its operating results for last year were as follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income $2,240,000 1,120,000 1,120,000 160,000 $ 960,000 Required: 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 41,000 units and $3,280,000, respectively. If the fixed expenses do not change, how much will net operating Income increase? 4-a, What is the degre of operating loverage based on last year's sales? 4b. Assume the president expects this year's unit sales to increase by 19%. 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 $69,000 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 $2.00 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 $960,000 net operating income as last year? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Req 4A Reg 45 Req 5A Reg 58 Reg 6 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 41000 units and $3,280,000, respectively. If the fixed expenses do not change, how much wil net operating income increase? 4-a. What is the degree of operating leverage based on last year's sales? 4-6. Assume the president expects this year's unit sales to increase by 19%. 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 $69,000 Increase in advertising, would Increase this year's unit sales by 25% 1. 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 $2.00 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 $960,000 net operating incomo as last year? Complete this question by entering your answers in the tabs below. Reg1 Red 2 Rego Reg 4 Reg 48 Reg SA Reg 58 Reg 6 Assume the president expects this year's unit sales to increase by 19%. Using the degree of operating leverage from last year what percentage increase in het operating Income will the company realize this year? (Round intermediate calculations and decimal . Net cporabng income increases ty CRA RSA > 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 41,000 units and $3,280,000, 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 soles? 4-6. Assume the president expects this year's unit sales to increase by 19%. 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 o 15% reduction in the selling price, combined with a $69,000 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 not operating income increase or decrease over lost year? 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $2.00 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 $960,000 net operating income as last year? Complete this question by entering your answers in the tabs below. Reg1 Reg2 Reg Reg 4 Reg 40 Reg SA Reg 58 Reg 6 The sales manager is convinced that a 15% reduction in the selling price, combined with a $69,000 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 il sideos are implemented? (Do not round intermediate calculations.) Netofaring income (ons) Re48 Res 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 41,000 units and $3,280,000, 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? 4-6. Assume the president expects this year's unlt sales to increase by 19%. 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 $69,000 Increase in advertising, would increase this year's unit sales by 25% 3. If the sales manager is tight, 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 wil 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 $2.00 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 $960,000 net operating income as last year? Complete this question by entering your answers in the tabs below. Reg: Reg 2 Reg Reg 4 Reg 45 Reg SA Reg 58 Req6 The sales manager is convinced that a 15% reduction in the selling price, combined with a $69,000 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.) increas (decrease) to not operating incomo