Frieden Company's contribution format income statement for last month is shown below:Sales (30,000 units)$1, 050, ODDVariable expenses630, 090Contribution margin120, 090Fixed expenses378, 600Operating income$42, 080Competition is intense, and Frieden Company's profits vary considerably from one year to the next Management is exploringopportunities to increase profitability.Required:1. Frieden's management is considering a major upgrade to the manufacturing equipment, which would result in fixed expensesincreasing by $420,000 per month. However, variable expenses would decrease by $14 per unit. Selling price would not change.Prepare two contribution format income statements, one showing current operations and one showing how operations would appear ifthe upgrade is completed. Show an Amount column, a Per Unit column, and a Percentage column on each statement.FRIEDEN COMPANYContribution Margin Income StatementPresentProposedAmountPer UnitAmountPer Unit2. Refer to the income statements in requirement 1 above. For both current operations and the proposed new operations, compute (a]the degree of operating leverage, (b) the break-even point in dollars, and (c) the margin of safety in both dollar and percentage terms.PresentProposeda. Degree of operating leverageb. Break-even point in dollarsCMargin of safety in dollarsMargin of safety in percentage3-a. Calculate the unit sales per month at which Frieden management will be indifferent between doing the major upgrade to themanufacturing equipment and not doing the upgrade.Unit salesper month 3-a. Calculate the unit sales per month at which Frieden management will be indifferent between doing the major upgrade to themanufacturing equipment and not doing the upgrade.Unit salesper month3-b. Based on the above analysis, should Frieden proceed with the major upgrade?O YesO No3-c. Why or why not?In this case, the indifference pointthe current levelof sales at which point the upgardehave an impact onthe operating income. So Frieden'sproceed to upgrade.4-a. Refer to the original data. Instead of doing the major upgrade to the equipment, management is considering introducing a newadvertising campaign that will increase fixed expenses by $50,000 per month. Management believes the new advertisements willincrease monthly unit sales by 20%. In this case what would be imapact on operating income.Operating income4-b. Should Frieden proceed with the new advertising campaign?O YesO No