Question 5 & 6 please

Stratford Company distributes a lightweight lawn chair that sells for $20 per unit. Variable expenses are $6 per unit, and fixed expenses total $210,000 annually Required: Answer the following independent questions: 1. What is the product's CM ratio? 70:% 2. Use the CM ratio to determine the break-even point in sales dollars. in sales S 300,000 3. The company estimates that sales will increase by $30,000 during the coming year due to increased demand. By how much should net operating income increase? S 21,000 4. Assume that the operating results for last year were as follows: Sales Less: Variable expenses S500,000 150,000 Contribution margin Less: Fixed expenses 350,000 210,000 Net operating income 140,000 5-a. Refer to the original data. Assume that the company sold 27,000 units last year. The sales manager is convinced that a 12% reduction in the selling price, combined with a $72,000 increase in advertising expenditures, would increase annual unit sales by 40%. Prepare two contribution format income statements: one showing the results of last year's operations, and one showing what the results of operations would be if these changes were made. (Do not round intermediate calculations. Round "Per Unit" answers to 2 decimal places.) Last Year Proposed Total Per Unit Total Pe Sales 5-b. Would you recommend that the company do as the sales manager suggests? Yes No 6. Refer to the original data. Assume again that the company sold 27,000 units last year. The president feels that it would be unwise to change the selling price. Instead, he wants to increase the sales commission by $3 per unit. He thinks that this move, combined with some increase in advertising, would double annual unit sales. By how much could advertising be increased with profits remaining unchanged? ncrease in advertisement cost