Problem 5-22 Basics of CVP Analysis; Cost Structure [LO5-1, LO5-3, LO5-4, LO5-5, LO5-6] Due to erratic sales of its sole product-a high-capacity battery for laptop computersPEM, Inc., has been experiencing difficulty for some time. The company's contribution format income statement for the most recent month is given below: Sales (13,100 units * $20 per unit) Variable expenses $ 262,000 131,000 Contribution margin Fixed expenses 131,000 146,000 Net operating loss $ 15,000) b. Assume that the company expects to sell 20,700 units next month. Prepare two contribution format income statements, one assuming that operations are not automated and one assuming that they are. PEM, Inc. Contribution Income Statement Not Automated Total Per Unit Automated Total Per Unit % % % % % 0 0 % 0 0 % $ 0 $ 0 c. Would you recommend that the company automate its operations? Yes No Problem 5-22 Basics of CVP Analysis; Cost Structure [LO5-1, LO5-3, LO5-4, LO5-5, LO5-6] Due to erratic sales of its sole product-a high-capacity battery for laptop computersPEM, Inc., has been experiencing difficulty for some time. The company's contribution format income statement for the most recent month is given below: Sales (13,100 units * $20 per unit) Variable expenses $ 262,000 131,000 Contribution margin Fixed expenses 131,000 146,000 Net operating loss $ 15,000) b. Assume that the company expects to sell 20,700 units next month. Prepare two contribution format income statements, one assuming that operations are not automated and one assuming that they are. PEM, Inc. Contribution Income Statement Not Automated Total Per Unit Automated Total Per Unit % % % % % 0 0 % 0 0 % $ 0 $ 0 c. Would you recommend that the company automate its operations? Yes No