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Networks Company manufactures wireless routers. The company's contribution format income statement for the most recent year is given below: Total Per Unit Percentage of Sales

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Networks Company manufactures wireless routers. The company's contribution format income statement for the most recent year is given below: Total Per Unit Percentage of Sales Sales [25.\" nits) ................. $2.500.\" sun [11% Less variable upones .............. M iii _?% Uomhrion moan ................. 1mm _?% Less Feed otpmses ................. 011% Operating reams ................... s mun Management believes operating income can be further improved and would like you to prepare the following analysis. Required: 1. Compute the company's CM ratio and variable expense ratio. 2. Compute the company's break-even point in both units and sales dollars. Use the equation method. 3. Assume that sales increase by $600,000 next year. It" cost behaviour patterns remain un- changed. by how much will the company's operating income increase? Use the CM ratio to determine your answer. 4. Refer to the original data. Assume that next year. management wants the company to earn a minimum prot of 5500.000. How many units will have to be sold to meet this target profit figure

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