Key Storsge Inc. produce: USB drwes. Soles hove been very erratic, whth some months showing o profit snd some montha showing s

los: The compony's contribution format income statement for the moat recent month is glven below:

Requlred:

Requlred: $1.$ Compute the compeny's CM rstio snd its break$-$even point in both unt: and dollars. $($Do not round Intermedlate calculations.

Round your "Bresk$-$even point in units" answer up to nesrest whale number.$).$

Answer is complete but not entirely correct.

The ssles mansger feels that an $$36,200$ increase in the montily sdvertaing budget, combined with sn intens fied effort by the

soles staff, will resut in o $$10,000$ incresse in monthly soles. If the ssles: manoger is right, whst will be the effiect on the compony's

monthly net opersting income or los:? $($Use the incrementsl spprosch in prepsring your answer.$)$

Answer is complete but not entirely correct.

Refer to the originsl dsta. The prealdent is convinced that o $10\%$ reduction in the selling price, combined with on incerese

of $$106,000$ in the monthy sodvertsing budget, will double un't sales. Should the compony moke these changes?

Ye:

No

Refer to the originsl dsta. The compony's solverting sgency thinks that s new pscksge would he'p ssles. The new pscksge being

proposed would incresse pockoging costa by $$10$ per unt. Assuming no other changes, how msny units would have to be sold esch.

month to eam a profit of $$4,740?($Do not round Intermedlate calculstions. Round your snswer up to nesrest whole number.$)$

Refer to the ariginel dsta. By outamating, the compsny could a sah the variable expense: in half. Hawever, fixed costs would incresse

by $$124,000$ per month.

a$.$ Compute the new CM rato and the new break$-$even point in both units snd dolers. $($Do not round intermedlate calculations.

Round your "Contribution margin ratio" answer to $2$ decimal places. Round your "Bresk$-$even point" onswers up to nesrest whole

number.$)$

b$.$ Assume thet the compsny expects to sell $21,200$ units next month. Prepore two contribution format income statements: one

sasuming thst operations sre not sutamsted, snd one sasuming that they sre. $($Do not round Intermediste calculations. Round 'Per

Untt" snd "Percentage" to $2$ decimal places.$)$

Answer is not complete.

c$.$ Thr psit of the question is nat port of your Connect saignment.

d$.$ What is the point of Indifference between the two options? $($Do not round intermediste calculations. Round your answer up to

nearest whole number.$)$