Memofax, Inc, produces memory enhancement software for computers. Sales have been very erratic, with some months showing a profit and some months showing a loss. The company's contribution format income statement for the most recent month is given below: Required: 1. Compute the company's CM ratio and its break-even point in both units and dollars. (Do not round intermediote caleuletions. Round your "Breok-even point in units" enswer up to nearest whole number.) 2. The sales manager feels that an $14,000 increase in the monthly advettising budget, combined with an intensified effort by the sales staff, will result in a $100,000 increase in monthly sales. If the sales manager is right what will be the effect on the company's monthly net operating income or loss? (Use the inciemental approach in preparing your answer) 3. Refer to vie original data. The president is convinced that a 7% reduction in the selling price, combined with an increase of $65,000 in the monthly advertising budget, wil double unit sales. Should the company inake these changes? Yes No 4. Refer to the original data. The companys advertising agency thinks that a new packoge would help sales. The new package being proposed would increase packaging costs by $0.5 per unit. Assuming no other changes, how many units would have to be sold each month to earn a profit of $5,100 ? (Do not tound intermedinte colculetions. Round your answer up to neorest whole number.) 5. Refer to the original data. Ay automating, the compony could slash its yariable expenses in that However, fixed costs would increase by 540.800 per month. . Compute the new CM ratio and the new break even point in both unis and dollars (Do not reund intermediate calculotions. Round your "Contribution mergin ratio" nnswer to 2 decimal ploces. Round your "Bgenk-even point" answers up to nearest whele number). 5. Refer to the onginal data. By automating the company could slash its variable expenses in half. However, fixed cos?s would increase by $40,800 per month a. Compute the new CM rato and the new break-even point in both units and dollars (Do not round intermediete coiculations. Round your "Contribution morgin retio" answer to 2 decimal places. Aound your "Break-even point" answers up to nearest whole number) b. Assumie that the company expects to sell 20,000 units next month Prepare wo contribulio format income statements: one assuming that operations are not ahorsated, and one assuming that they are (Do not round intermediste calculations. Round "Per Unit" and "Percentnge" to 2 decimal pleces.) c. This part of the question is not part of your Connect assignment. d. What is the point of indifference between the two options? (Do not round intermediate calculations. Round your answer up to nebrest whole number.) Memofax, Inc, produces memory enhancement software for computers. Sales have been very erratic, with some months showing a profit and some months showing a loss. The company's contribution format income statement for the most recent month is given below: Required: 1. Compute the company's CM ratio and its break-even point in both units and dollars. (Do not round intermediote caleuletions. Round your "Breok-even point in units" enswer up to nearest whole number.) 2. The sales manager feels that an $14,000 increase in the monthly advettising budget, combined with an intensified effort by the sales staff, will result in a $100,000 increase in monthly sales. If the sales manager is right what will be the effect on the company's monthly net operating income or loss? (Use the inciemental approach in preparing your answer) 3. Refer to vie original data. The president is convinced that a 7% reduction in the selling price, combined with an increase of $65,000 in the monthly advertising budget, wil double unit sales. Should the company inake these changes? Yes No 4. Refer to the original data. The companys advertising agency thinks that a new packoge would help sales. The new package being proposed would increase packaging costs by $0.5 per unit. Assuming no other changes, how many units would have to be sold each month to earn a profit of $5,100 ? (Do not tound intermedinte colculetions. Round your answer up to neorest whole number.) 5. Refer to the original data. Ay automating, the compony could slash its yariable expenses in that However, fixed costs would increase by 540.800 per month. . Compute the new CM ratio and the new break even point in both unis and dollars (Do not reund intermediate calculotions. Round your "Contribution mergin ratio" nnswer to 2 decimal ploces. Round your "Bgenk-even point" answers up to nearest whele number). 5. Refer to the onginal data. By automating the company could slash its variable expenses in half. However, fixed cos?s would increase by $40,800 per month a. Compute the new CM rato and the new break-even point in both units and dollars (Do not round intermediete coiculations. Round your "Contribution morgin retio" answer to 2 decimal places. Aound your "Break-even point" answers up to nearest whole number) b. Assumie that the company expects to sell 20,000 units next month Prepare wo contribulio format income statements: one assuming that operations are not ahorsated, and one assuming that they are (Do not round intermediste calculations. Round "Per Unit" and "Percentnge" to 2 decimal pleces.) c. This part of the question is not part of your Connect assignment. d. What is the point of indifference between the two options? (Do not round intermediate calculations. Round your answer up to nebrest whole number.)