PARTI Exercise N1 PEACE FOREST Co. manufactures several electric products. Rechargeable light is one of the PEACE FOREST products sells for $125 per unit. Total fixed expenses related to rechargeable electric light are $296,125 per month and variable expenses involved in manufacturing this product are $115 per unit. Monthly sales are 12,500 rechargeable lights. Required: 1. Compute break-even point of the company in dollars and units. 2. According to a research conducted by sales department, a 11.5% reduction in sales price will result in 27% increase in unit sale. Prepare two income statements in contribution margin format, one using the current price and one using proposed price (10% below the old sales price). 3. Compute the number of rechargeable lights to be sold to eam a net operating income of $195,100 per month (use original data). Exercise N2 LAND FIRE In. manufactures small batteries devices used in clocks, toys, and some other electronic devices. The last month's income statement of LAND FIRE is given below: PER UNIT $ Sales Variable expenses Contribution margin Fix expenses Net operating income TOTAL $ 335.200 193.525 141.675 122.375 S 19.300 12 8 4 S Required: Prepare LAND FIRE new income statement under each of the following conditions: 1. The sales volume increases by 15%. 2. The selling price decreases by 20% per unit, and the sales volume increases by 30%. 3. The selling price increases by 50% per unit, fixed expenses increase by $20,000 and the sales volume decreases by 5% 4. Variable expenses increase by 20% per unit, the selling price increases by 12%, and the sales volume decreases by 10%