Keltar Company manufactures and sells a specialized cordless telephone for high electromagnetic radiation environments. The company's contribution format income statement for the most recent year is given below: Total Per Unit Percent of Sales Sales (20,000 units) $1,200,000 $60 100% Variable expenses 900,000 45 ? % Contribution margin 300,000 $ 15 ? % Fixed expenses 240,000 Net operating income $ 60,000 Management is anxious to increase the company's profit and has asked for an analysis of a number of items. Using the data above answer questions 1-6. Required: Questions 1-5 are 2 points each 1. Compute the company's CM ratio and variable expense ratio. 2. Compute the company's break-even point in both unit sales and dollar sales. Use the equation method. 3. Assume that sales increase by $400,000 next year. If cost behavior patterns remain unchanged, by how much will the company's net operating income increase? 4. Assume that next year management wants the company to earn a profit of at least $90,000. How many units will have to be sold to earn this target profit? 5. Compute the company's margin of safety in both dollar and percentage form