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 $2,080,000 1,040,000 1,040,000 180,000 Net operating income 860,000 Required: Answer each question independently based on the original data: 1. What 2. Use the CM ratio to determine the break-even point . If this year's sales increase by $48,000 and fixed expenses do not change, how much will net operating income increase? What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's sales to increase by 17%. Using the degree of operating leverage from last year, what the product's CM ratio? dollar sales 5. The saincrease in net operating income will the company realize this year? increase this ger is convinced that a 12% reduction in the selling price, combined with a $66,000 increase in advertising, would a. If the sales man ales by 25% b. If the sales manager's ido at would be this year's net operating income if his ideas are implemented? 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 per emented, how much will net operating income increase or decrease over last year? thinks that thic president increase this year's advertising expense and still earn the same $860,000 net operating income as last year? ve, combined with some increase in advertising, would increase this year's sales by 25%. How much could the Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4A Req 4B Req 5A Req 6 Req 5B 2. Use the CM ratio to determine the break-even point in dollar sales. 3. If this year's sales increase by $48,000 and fixed expenses do not change, how much will net operating income inc 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's sales to increase by 17%. Using the degree of operating leverage from la percentage increase in net operating income will the company realize this year? 5. The sales manager is convinced that a 12% reduction in the selling price, combined with a $66,000 increase in adver 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 t 6. Th Req1ent does not want to chanqe the selling price. Instead, he wants to increase the sales commission by $1.90 thinks uiat is move, combined with some increase in advertising, would increase this year's sales by 25%. How much c president increase this year's advertising expense and still earn the same $860,000 net operating income as last year? manager's ideas are implemented, how much will net operating income increase or decrease over last yea Complete this question by entering your answers in the tabs below. Req 6 Req 5B Req 4B Req SA Req 4A Req 3 Req 1 Req 2 What is the product's CM ratio? % CM ratio Req 2 Req 1 lar sales. Se by $48,000 and fixed expenses do not change, how much will net operating income inc 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's sales to increase by 17%. Using the degree of operating leverage from l percentage increase in net operating income will the company realize this year? 5. The sales manager is convinced that a 12% reduction in the selling price, combined with a $66,000 increase in adve 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 ye 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $1.90 thinks that this move, combined with some increase in advertising, would increase this year's sales by 25%. How much 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 6 Req 58 Req 5A Req 4B Req 3 Req 4A Req 2 Req 1 Use the CM ratio to determine the break-even point in dollar sales. (Do not round intermediate calculations.) Break-even point in dollar sales Req 3 Req 1 2. Use the CM ratio to determine the break-even point in dollar sales 3. If this year's sales increase by $48,000 and fixed expenses do not change, how much will net operating income increas 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's sales to increase by 17%. Using the degree of operating leverage from last y percentage increase in net operating income will the company realize this year? 5. The sales manager is convinced that a 12% reduction in the selling price, combined with a $66,000 increase in advertisir 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 thinks that this move, combined with some increase in advertising, would increase this year's sales by 25%. How much could president increase this year's advertising expense and still earn the same $860,000 net operating income as last year? Complete this question by g your answers in the tabs below. Req 3 Reale Req 4B Req 5A Req 6 Req 5B Req 4A Req 1 Req 2 If this year's sales increase by $48,000 and fixed expenses do not change, how much will net operating income increase? by Net operating income Req 4A Req 2 2. Use the CM ratio to determine the break-even point in dollar sales 3. If this vear's sales increase by $48,000 and fixed expenses do not change, how much will net operating income increa 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's sales to increase by 17%. Using the degree of operating leverage from last percentage increase in net operating income will the company realize this year? 5. The sales manager is convinced that a 12% reduction in the selling price, combined with a $66,000 increase in advertis 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 pe thinks that this move, combined with some increase in advertising, would increase this year's sales by 25%. How much cou 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 y ers in the tabs below. Req 4A Re4A Req 6 Req 5B Req 4B Req 5A Req 3 Req 2 Req 1 What is the degree of operating leverage based on last year's sales? (Round intermediate calculations and final answer to 2 decimal places.) Degree of operating leverage Req 4B Req 3 2. Use the CM ratio to determine the break-even point in dollar sales. 3. If this year's sales increase by $48,000 and fixed expenses do not change, how much will net operating income inc 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's sales to increase by 17%. Using the degree of operating leverage from la percentage increase in net operating income will the company realize this year? 5. The sales manager is convinced that a 12% reduction in the selling price, combined with a $66,000 increase in adver 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 yea 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $1.90 thinks that this move, combined with some increase in advertising, would increase this year's sales by 25%. How much c 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 6 Req 58 Req 4A Req 5A Req 4B Req 3 Req 1 Req 2 Assume the president expects this year's sales to increase by 17%. 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 5A