Stratford Company distributes a lightweight lawn chair that sells for $20 per unit. Variable expenses are 25% of sales, and fixed expenses total $427,500 annually. Required: Answer the following independent questions: 1. What is the product's CM per unit? 2. Use the CM per unit to determine the break-even point in units. 5-a. Refer to the original data. Assume that the company sold 40.000 units last year. The sales manager is convinced that a 3% reduction in the selling price, combined with a $148,000 increase in advertising expenditures, would increase annual unit sales by 30%. 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.)