16. Labor rates increased by $5 per unit. If the selling price per unit remains constant at $5. What is the new CM Ratio and the new break even point in units?

17. From the information in Part II where the variable costs increased by $5. How many units will have to be sold to earn the same net income of $884,000.

18. Continue with the data in part II, the company may need to increase the price of its units. If the company has the variable cost from Part II with a CM Ratio of .44 and wants to maintain the same CM ratio from Part I of .53 what selling price per unit must be charge to cover increased labor charges.

19. Looking back at the source information, the company is looking to build a new automated plant. The factory would cut variable costs by 40% but it would cause fixed costs to increase by 90%. If the new factory is built, what would be the companys new CM ratio and new breaker point in number of units.

Question 15 Hatchet World produces chain saws. One of the company's products, a T1000 sells for $55. They are produced in an old plant that relies heavily on direct labor workers Consequently variable costs are high totaling $26 per product. During the prior year, the company sold 46,000 units with the following operating results: Sales $2,530,000 Variable Expenses $1,196,000 Contribution Margin $1,334,000 Fixed expenses $ 450,000 Net Operating Income $ 884,000 Hatchet World must maintain and improve operating results for its products. Compute the CM ratio, the break-even point in units, and the degree of operating leverage at last year's level of sales