Sales (30,000 units x $20.00 per unit)	$600,000
Variable Expenses	360,000
Contribution Margin	240,000
Fixed Expenses	250,000
Net Operating Loss	$(10,000)

5. By automating certain operations, the company could reduce variable costs by $2.00 per unit. However, fixed cost would increase by $65,000 each month. a. Compute the new CM ratio and new break-even point in both units and dollars. b. Assume that the company expects to sell 40,000 units next month. Prepare two contribution format income statements, one assuming that operations are not automated and one assuming that they are. (Show data on a per unit and percentage basis, as well as in total for each alternative) c. Would you recommend that the company automates its operations? Explain.