Please only answer question 5

Memofax, Inc. produces memory enhancement software for computers. Sales have been very erratic, with some months showing a profit and some months showing a loss. The company's contribution format income statement for the most recent month is given below: Sales (22,000 units at $25 per unit) Less: Variable expenses $550,000 330,000 Contribution margin Less: Fixed expenses 220,000 225,000 Net operating loss $ (5,000) Required: 1. Compute the company's CM ratio and its break-even point in both units and dollars. Contribution margin ratio Break-even point in units Break-even point in dollars 2. The sales manager feels that an $25,000 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in a $155,000 increase in monthly sales. If the sales manager is right, what will be the effect on the company's monthly net operating income or loss? (Use the incremental approach in preparing your answer.) 5. Refer to the original data. By automating, the company could slash its variable expenses in half However, fixed costs would increase by $41,000 per month. a. Compute the new CM ratio and the new break-even point in both units and dollars. (Do not round intermediate calculations. Round "Contribution Margin Ratio" to 2 decimal places.) Contribution margin ratio Break-even point in units Break-even point in dollars b. Assume that the company expects to sell 27,000 units next month. Prepare two contribution format income statements: one assuming that operations are not automated, and one assuming that they are. Do not round intermediate calculations. Round "Per Unit" and "Percentage" to 2 decimal places.) Comparative Income Statements Not Automated Automated Total Per Unit Percentage Total Per Unit Percentage Sales