Feather Friends, Inc, distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable and fixed expenses total $200,000 per year. Its operating results for last year were as follows expenses are $4000 per unit Sales Variable expenses Contribution margin Fixed expenses Net operating income $ 2,069,880 1.868,pe 1,ee0,e8e 200,e0e s800,0 Required: Answer each question independently based on the original data: 1. What is the products CM ratio? 2. Use the CM ratio to determine the break-even point in dollar sales 3. If this year's sales increase by $49,000 and 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-b Assume the president expects this year's saies to increase by 13% 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 14% reduction in the seling price, combined with a S61000 increase in advertising, would increase this year's unit sales by 25% a. If the sales manager is nght, what would be this years net operating income t his ideas are impiemented? Do you recommend imolementing the sales manager's suggestions? 6. The president does not want to change the selling price Insteed. he wents to increase the sales commission by $1.80 per unit. He thinks that this move, combined wth sorve increase in advertising, would ncrease this year's sales by 25% How much could the presicent increase this year's advertising expense and sal eam the same $800009 net operating Income as last year? te this quest Red SB Reg 5 s net operating income if his ideas hing