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 Total Per Unit Percentage of Sales Sales (25,000 units)............ Less variable expenses. $2,500,000 1,500,000 $100 60 100% 7% .. Contribution margin......... 1,000,000 $ 40 7% Less fixed expenses 800.000 Operating income $ 200,000 Management believes operating income can be further improved and would like you to prepare the following analysis. Required: 1. Compute the company's Contribution Margin Ratio (2 marks) 2. Variable Expense Ratio. (3 marks) (2 marks) 3. Compute the company's break-even point in units. 4. Compute the company's break-even point in sales dollars. (2 marks) Page 1 of 13 5. Assume that sales increase by $600,000 next year. If cost behaviour patterns remain unchanged, by how much will the company's operating income increase? Use the CM ratio to determine your answer. (3 marks) Refer to the original data to answer Question 6. 6. Assume that next year, management wants the company to earn minimum profit of $500,000. How many units will have to be sold to meet this target profit figure? (3.marks) Page 1 / 2 a + Refer to the original data transwer questions and o