Given Data P05-20: MEMOFAX, INC. Information from recent month's income statement: Sales Units sold Sales price per unit Variable expenses Contribution margin Fixed expenses 270,000 13,500 20 189,000 81,000 90,000 $ (9,000) Net operating loss Information for Part 2: Increase in monthly advertising budget $ 8,000 Increase in monthly sales $ 70,000 Information for Part 3: Reduction in selling price Increase in monthly advertising budget Increase in monthly unit sales 10% 35,000 200% Information for Part 4: Increase in packaging cost per unit $ Targeted profit each month $ SS 0.60 4,500 Information for Part 5: Reduction in variable costs per unit 50% Increase in monthly fixed costs $ 118,000 Expected sales in units 20,000 1. Contribution margin ratio: Sales Variable expenses Contribution margin Break-even point: Sales price per unit Variable expense Fixed expense Profits Break-even point (units) Break-even point (dollars) Alternative break-even point calculation: Break-even point (units) Break-even point (dollars) 2. Incremental contribution margin: Increased sales Less increase advertising cost Increase in monthly net income Current loss per month Add increase Total income per month 3. Sales Variable expenses Contribution margin Fixed expenses Net loss 4. Units sold to reach target profit: Sales price per unit Unit contribution margin Fixed expenses Profits Number of units Alternative calculation: Number of units MEMOFAX, INC. Percent Total Per Unit of Sales 100% 100% Try again! Try again! Try again! Try again! Try again! Try again! 5a. Contribution margin ratio: Sales price per unit Variable expenses Contribution margin Break-even point: Fixed expense Unit contribution margin Break-even point in unit sales Contribution margin ratio Break-even point in sales dollars 5b. Comparative income statements: Sales Variable expenses Contribution margin Fixed expenses Percent Per Unit of Sales 100% 100% Try again! Try again! Not Automated Automated Total Per Unit % Total Per Unit % 100% 100% 100% 100% S Try againt Net operating income Try again