PEM, Incorporated, is experiencing financial difficulty due to erratic sales of its only product, a high$-$capacity battery for laptop computers. The company$$s contribution format income statement for the most recent month is given below:

Sales $(13,000$ units $\backslash$times $$20$ per unit$)$ $ $260,000$

Variable expenses $130,000$

Contribution margin $130,000$

Fixed expenses $145,000$

Net operating loss $ $(15,000)$

$1.)$ Compute the company$$s CM ratio and its break$-$even point in unit sales and dollar sales.

$2.)$ The president believes a $$6,900$ increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will increase unit sales and the total sales by $$85,000$ per month. If the president is right, what will be the increase $($decrease$)$ in the company$$s monthly net operating income?

$3.)$ Refer to the original data. The sales manager is convinced that a $10\%$ reduction in the selling price, combined with an increase of $$33,000$ in the monthly advertising budget, will double unit sales. If the sales manager is right, what will be the revised net operating income $($loss$)?$

$4.)$ Refer to the original data. The Marketing Department thinks that a fancy new package for the laptop computer battery would grow sales. The new package would increase variable costs by $$0\mathrm{.}80$ per unit. Assuming no other changes, how many units would have to be sold each month to attain a target profit of $$4,000?$

$5$a$.)$ Refer to the original data. By automating, the company could reduce variable expenses by $$3$ per unit. However, fixed expenses would increase by $$53,000$ each month. Compute the new CM ratio and the new break$-$even point in unit sales and dollar sales.

$5$B$.)$ Refer to the original data. By automating, the company could reduce variable expenses by $$3$ per unit. However, fixed expenses would increase by $$53,000$ each month. Assume the company expects to sell $20,800$ units next month. Prepare two contribution format income statements, one assuming operations are not automated and one assuming they are. $($Show data on a per$-$unit and percentage basis, as well as in total, for each alternative.$)$

$5$C$.)$ Refer to the original data. By automating, the company could reduce variable expenses by $$3$ per unit. However, fixed expenses would increase by $$53,000$ each month. Would you recommend the company automate its operations $($Assuming that the company expects to sell $20,800$ units$)?$