Stratford Company distributes a lightweight lawn chair that sells for $20 per unit. Variable expenses are 30% of sales, and fixed expenses total $420,000 annually. Required: Answer the following independent questions: 1. What is the product's CM per unit? Contribution margin per unit 2. Use the CM per unit to determine the break-even point in units. Break-even point in units 3. The company estimates that sales will increase by $105,000 during the coming year due to increased demand. By how much should net operating income increase? Increase in operating income 4. Assume that the operating results for last year were as follows: Sales Less: Variable expenses Contribution margin Less: Fixed expenses Net operating income $800,000 240,000 560,000 420,000 $140,000 a. Compute the degree of operating leverage at the current level of sales. (Round your answer to 1 decimal place.) Degree of operating leverage b. The president expects sales to increase by 20% next year. By how much should net operating income increase? Increase in operating income