Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $80 per unlt. Varlable expenses are $40.00 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows: Bales Variable expenses Contribution margin Fixed expenses Net operating income $ 2,240,000 1,120,000 1,120,000 180,000 $ 940,000 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 polnt In dollar sales. 3. If this year's sales Increase by $42,000 and 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 sales to Increase by 18%. Using the degree of operating leverage from last year, what percentage Increase In net operating Income will the company realze this year? 5. The sales manager is convinced that a 13% 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. Do yo u recommend Imple menting the sales manager's suggestion s? 6. The president does not want to change the selling price. Instead, he wants to Increase the sales commission by $2.40 per unit. He thinks that this move, combined with some increase in advertising, would increase this year's sales by 25%. How much could the presldent Increase this year's advertising expense and still earn the same $940,000 net operating Income as last year