Stratford Company distributes a lightweight lawn chair that sells for $20 per unit. Varlable expenses are 30%6 of sales, and foed expenses total $420.000 annually. Required: Answer the following independent questions: 1. What is the product's CM per unt? 2. Use the CM per unit to determine the break-even point in units. 3. The company estimates that sales will increase by $105,000 duning the coming year due to increased demand, By how much should net operating income kicrease? 4. Assume that the operating results for last year were as follows: a. Compute the degree of operating leverage at the current level of sales. (Round your onswer to 1 decimal place.) b. The presiclent expects sales to increase by 20% next year. By how much should net operating incone uncrease? 5-6. Piefer to the original data. Assume that the company sold 42.000 units last yeat. The sales manager is comvinced that a:2\%s reduction in the selling price, comblhed with a $152.000 increase in advertising expendilures, would increase annual unit sales by 3006. 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 intermediote caleulotions. Round "Per Unit" answers to 2 decimol ploces) 5-b. Would you tecomnsend that the compaty do as the sales inanager suggesta? 6. Refer to the original data. Assume again that the company sold 42,000 unlis last year. The president feels that it wouidd be unwise to change the selling price. Instead, she wants to increase the sales commission by $2 per unit She 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? Do not prepare an income statement; use the incremental analysis approach. Stratford Company distributes a lightweight lawn chair that sells for $20 per unit. Varlable expenses are 30%6 of sales, and foed expenses total $420.000 annually. Required: Answer the following independent questions: 1. What is the product's CM per unt? 2. Use the CM per unit to determine the break-even point in units. 3. The company estimates that sales will increase by $105,000 duning the coming year due to increased demand, By how much should net operating income kicrease? 4. Assume that the operating results for last year were as follows: a. Compute the degree of operating leverage at the current level of sales. (Round your onswer to 1 decimal place.) b. The presiclent expects sales to increase by 20% next year. By how much should net operating incone uncrease? 5-6. Piefer to the original data. Assume that the company sold 42.000 units last yeat. The sales manager is comvinced that a:2\%s reduction in the selling price, comblhed with a $152.000 increase in advertising expendilures, would increase annual unit sales by 3006. 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 intermediote caleulotions. Round "Per Unit" answers to 2 decimol ploces) 5-b. Would you tecomnsend that the compaty do as the sales inanager suggesta? 6. Refer to the original data. Assume again that the company sold 42,000 unlis last year. The president feels that it wouidd be unwise to change the selling price. Instead, she wants to increase the sales commission by $2 per unit She 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? Do not prepare an income statement; use the incremental analysis approach