PEM Incorporates is experiencing financial difficulty due to erratic sales of its only product, a high-capacity battery for laptop computers. The companys contribution format income statement for the most recent month is given below: Sales (12,900 units x $20 per unit) $258,000 Variable expenses 129,000 Contribution margin 129,000 Fixed expenses 144,000 Net operating loss $ (15,000)

Refer to the original data. The sales manager is convinced that a 10 % reduction in the selling price combined with an increase of $33,00 in the monthly advertising budget will double unit sales. If the sales manager is right, what will be the revised net ovvv. perating income (loss)?

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 per month. a. Compute the new CM ration and the new break even point in unit sales and dollar sales.