feather friends incorperated

Feother Friends, Incorporated, distributes a high-qualty wooden birdhouse that sells for $20 per unit. Variable expenses are $8 per unit, and flixed expenses total $180,000 per year. its operating results for last year were as follows: Required: Answer each question independently based on the original dota: 1. What is the products CM ratio? 2. Uso the CM ratio to determine the break-even point in sales dollars. 3. Assume this year's total sales increase by $55,000, If the fixed expenses do not change, how much will operating income increase? Assume that the operating results for fast yoar were as in the question data. 4.a. Compute the degree of operating leverage based on last year's sales. 4-b. The president expects sales to increase by 222% next year. Using the degree of operating leverage from last year, what percentage increase in operating income will the company realize this year? Calculate the dollar increase in operating income 5. The sales manager is convinced that a 8% reduction in the selling price, combined with a $28,000 increase in advertising. would increase this year's unis soles by 25% a. If the sales maneger is right, what would be this years operating income if his ideas are implemented? b. If the sales manogers ideas are implemented, how much wili operating incomo increase or decrease over last year? 6. The president does not want to change the veling price. Instead, he wonts to increase the sales commission by $1 per unit He thinks that this move, combined with some increase in advertisng. would increase this yoars unit sales by 25%. How much could the president increase this years advertsing expense and stili carn the same $36,000 operating income as last year? Complete this question by entering your answers in the tabs below. What is the product's CM ratio