Saika Telecom distributes a supreme-quality microphone that has a selling price of $ 30 per unit. Variable expenses are $12 per unit, and fixed expenses total $190,000 per year. Its operating results for last year were as follows: Sales $450,000 Variable expense 180,000 Contribution Margin 270,000 Fixed Expense 190,000 Net operating income 80,000 Required: (7) Answer each question independently based on the original data: 1. What is the product's variable expense ratio? 2. Use the CM ratio to determine the break-even point in dollar sales. 3. If this year's sales increase by $80,000 and fixed expenses do not change, how much will net operating income increase? 4. a. What is the degree of operating leverage based on last year's sales? b. Assume the president expects this year's sales to increase by 30%. Using the degree of operating leverage from last year, what percentage increase in net operating income will the company realize this year? 5. The sales manager is convinced that a 5% reduction in the selling price, combined with a $30,000 increase in advertising, would increase this year's unit sales by 25%. If the sales manager is right, what would be this year's net operating income if his ideas are implemented? Do you recommend implementing the sales manager's suggestions? Why