Problem 4 Given the following: Total (SAR) Sales (40,000 units) 4,800,000 Variable expenses 2,880,000 Contribution margin 1,920,000 Fixed expenses 1,200,000 Net operating income 720,000 C. e. Required: a. Calculate variable expense ratio b. Calculate contribution margin ratio Calculate break even sales in Units d. Calculate break even sales in SAR How many units must be sold to make a profit of 300,000 SAR? Management is considering increasing the quality of its units by spending SAR 5 more per unit in variable costs and increasing advertising by SAR 80,000. Management believes these changes will increase unit sales by 20% at the same price. f. Calculate the new operating profit or loss. g. Explain whether management should make the change and why or why not