Required:

Compute the company's $CM$ ratio and its break$-$even point in unit sales and dollar sales.

The president believes a $$6,900$ increase in the monthly advertising budget, combined with an intensified effort by the sales staff,

will increase unit sales and the total sales by $$84,000$ per month. If the president is right, what will be the increase $($decrease$)$ in the

company's monthly net operating income?

Refer to the original data. The sales manager is convinced that a $10\%$ reduction in the selling price, combined with an increase of

$$32,000$ in the monthly advertising budget, will double unit sales. If the sales manager is right, what will be the revised net

operating income $($loss$)?$

Refer to the original data. The Marketing Department thinks that a fancy new package for the laptop computer battery would grow

sales. The new package would increase variable costs by $$0\mathrm{.}60$ per unit. Assuming no other changes, how many units would have

to be sold each month to attain a target profit of $$4,000?$

Refer to the original data. By automating, the company could reduce variable expenses by $$3$ per unit. However, fixed expenses

would increase by $$58,000$ each month.

a$.$ Compute the new CM ratio and the new break$-$even point in unit sales and dollar sales.

b$.$ Assume the company expects to sell $20,100$ units next month. Prepare two contribution format income statements, one assuming

operations are not automated and one assuming they are. $($Show data on a per$-$unit and percentage basis, as well as in total, for

each alternative.$)$

c$.$ Would you recommend the company automate its operations $($Assuming that the company expects to sell $20,100$ units$)?$