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Please help me with this I think I got CM ratio right but can't figure it out. q :11. cducationcom dscace s SuggestedSttes 1r WebSltceGallery

Please help me with this I think I got CM ratio right but can't figure it out.

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q \":11. cducationcom dscace s SuggestedSttes 1r WebSltceGallery Apple I TexasWorklorce. * RECIUIlmgd-Htrzn " ( > ,0 A. \"91.053315 [05:43? [0515.119 LOSL-G\" J \"*7 r" ' h 'H'"' 0 Due to erratic sales of its sole productwa high-capacity battery for laptop computers-FEM. Inc.. has been experiencing nancial [ dtlculty for some time. The company's contribution format income statement for the most recent month is ghen below: Sales (19.500 units 3 $30 per unit) 3585.000 Variable expenses 409.500 Contribution margin 175.500 ' Fixed expenses M Net operating loss M) Required: l. Compute the company's CM ratio and its break-even point in unit salE and dollar sales. 2. The president believes that a 516.000 increase in the monthly advertising budget. combined with an intensied effort by the sales staff. will increase unit sales and the total sales by $80,000 per month. ll\" 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 560.000 In the monthly advertising budget, will double unit sales. [fthe 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 packaging costs by 75 cents per unit. Assuming no other changes. how many units would have to be sold each month to attain a target prot of $9,750? 5. Refer to the original data. By automating. the company could reduce variable expenses by $3 per unit. However. xed expenses would increase by $72,000 each month. 3. Compute the new CM ratio and the new breakeven point in unit sales and dollar sales. b. Assume that the company expects to sell 26.000 umts next month. Prepare two contribution format income statements. one assuming that operations are not automated and one assuming that they are. (Show data on a per unit and percentage basis. as well as in total. for each alternative.) c. Would you recommend that the company automate its operations? Explain. page 237

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