Problem 5-23 Basics of CVP Analysis [LO5-1, LO5-3, LO5-4, LO5-5, LO5-8] Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $160,000 per year. Required: Answer the following independent questions: 1. What is the product's CM ratio? 5 % 2. Use the CM ratio to determine the break-even point in dollar sales. 320,000 sales 3. Due to an increase in demand, the company estimates that sales will increase by $58,000 during the next year. By how much should net operating income increase (or net loss decrease) assuming that fixed expenses do not change? increases 29,000