init. and fixd expenses total $360,000 per year. its operaling results for likt year weie as follows. Required: Answer each question independenty based on the orighal data: 1. What is the products CM ratio? 2. Use the CM ratio to determine the break-even point in soles dollars. 3. Assume this year's total sales inciease by $55,000, If the fixed expenses do not change, how moch wal operating income increase? Assurte that the coperating results for last year were as in the question data. 4-6. Compute the degree of opecating leverage based on last years sales. 4-b. The president expects sales to increase by 1056 next year. Using the degree of operating leverage from tast yeac, what percentace increatse in operating income will the conpany realize this year? Calculate the dollar increase in operating income. 5. The sales manager is convinced that a 12% reduction in the selling price, combined with a $28.000 increase in advertising, would increase this years unit sales by 25% a. If the sales manager is right, whot would be this years operating income if his ideas are inglemented? b. It the sales manager's ideas are implemented, how much wil operating incone increase of deciease over last year? Assume that the operating results for list year were in in the question data. 4-a. Compute the degree of operating loverage based on last your's sales. 4-b. The president expects sales to increase by 10% next yeur. Using the degree of operating leverage from liast year, what percintage 5. The sales manager is convinced that a 12% reduction in the selling price, combined with a $28,000 increase in advertising, wodit inctease this year's unil sales by 25%. ince a. If the sales manager is right, what would be this year's operating income if his ideas are implemented? b. If the sales manager's ideas are implemented, how much will operating income increase or decrease over last year? 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $1 per unit. Ife 6. The president does not want to change the selling price; instead, he wants to increase the wales commission thats move, combined with some increase in advertising, would increase this year's unit sales by 25%. How much could the president increase this year's advertising expense and still eam the same $54,000 operating income as last year? Complete this question by entering your answers in the tabs below. Assume that the operating results for last year were as in the question data. Compute the degree of aperating levisage based