Omicron Company manufactures decorative iron railings. The following is the data for the month of November regarding the present level of sales.

	Total
Sales (6,000 units)	$ 240,000
Direct material (variable)	$ 48,000
Direct labor (variable)	$ 60,000
Overhead: Variable Fixed	$ 12,000 $ 30,000
Selling & Administrative: Variable Fixed	$ 24,000 $ 42,000

Required: Show calculation in details!

1. Prepare a contribution format income statement at the present level of sales (6,000 units).

2. Compute the following:
   1. The contribution margin per unit and contribution margin ratio
   2. the break-even point in units and in sales dollars

3. Compute the number of units and the dollar amount of next months sales that Omicron would need to earn $60,000 operating profit.

4. Refer to the original data, management is considering using a new component that would increase the direct material cost by $2 per unit. Since the new component would improve the company's product, it is predicted that monthly sales would increase by 200 units. What should be the overall effect on the company's monthly net operating income of this change if fixed expenses are unaffected? Explain in paragraph.

5. Refer to the original data, Omicron is considering expanding its business to the ASEAN region. This would make the per unit variable selling and administrative expenses increase by 15%, and its fixed overhead costs increase by 12%.
   1. What will be the new break-even point in units and in sales dollars?
   2. Would you recommend that Omicron expand its business? Explain in paragraph.

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