Frieden Company's contribution format income statement for the most iecent month k glven below The industry in which Frieden Company operates is quite sensitive to cyclical movements in the economy. Thus, profits vary. considerably from year to year according to general economic conditions. The company has a large amount of unused capacity and is. stuchying ways of improving protits Required: 1. New equipment has come on the market that would allow Frieden Company to automate a portion of its operations, Varable expenses would be reduced by $6.60 per unL. However, fixed expenses would increase to a total of $582.120 each month. Prepare two contribution format income statements: one showing ptesent operations, and one showing how cperations would appear if the new equipment were purchased. (Input oll omounts os positive volues exeept losses which should be indicated by minus sign. Round your "Per unit" answers to 2 decimal places.) 2. Fefer to the income statements in Requirement (t) above. For both present operations and the proposed new operations, Compute. 0. The degree of opetating leverage b. The breok-even point in dollars. c. The margin of sofety in both dollar and percentage terms 3. Refer again to the data in Requirement (t) above. As a managet, what factor would be paramount in your mind in deciding whethet to purchase the new equipment? (Assume that ample funds are avallable to make the purchase) Stock level maintained Performance of peers in the industry Cyclical movements in the economy Reserves and surplus of the company 4. Refer to the original data. Rather than purchase new equipment, the marketing manager argues that the compamy' marketing strategy should be changed Instead of paying sales commissions, which are included in variable expenses, the marketing manager suggests that salespeople be paid fixed salaries and that the company invest heavlly in advertising. The marketing manager daims that this new approach would increase unit sales by 50% without any change in selling price, the company's new monthly fixed expenses would be $323,400, and its net operating income would increase by 25% Compute the break even point in dollar sales for the company under the new marketing strategy. Do you ogree with the marketing manager's proposal