PROBLEM 5-22 Basics of CVP Analysis; Cost Structure [LO5-1, LO5-3, LO5-4, Lo5-5, LO Due to erratic sales of its sole product-a high-capacity battery for laptop computers- PEM, Inc.. ontribution format income state- ment for the most recent month is given below: $585,000 Sales (19,500 units $30 per unit) . . . . . . . . . Variable expenses . . 409,500 175,500 180,000 S (4.500) Required: l. Compute the company's CM ratio and its break-even point in both unit sales and dollar sales. onthly advertising budget, combined with an intensified effort by the sales staff, will result in an $80,000 increase in monthly sales. If the president 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.) Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of $60,000 in the monthly advertising budget, will double unit sales. What will the new contribution format income statement look like if these changes are adopted? 3 4. Refer to the original data. The Marketing Department thinks that a fancy new package for the laptop computer battery would help sales. The new package would increase packaging c month to earn a profit of $9,750? to be sold each