Stratford Company distributes a lightweight lawn chair that sells for \$20 per unit. Variable expenses are \$6 per unit, and fixed expenses total $451,500 annually. Required: Answer the following independent questions: 1. What is the product's CM ratio? 2. The company estimates that sales will increase by $120,000 during the coming year due to increased demand. By how much should net operating income increase? 3-a Refer to the original data. Assume that the company sold 45,000 units last year. The sales manager is convinced that a 12% reduction in the selling price, combined with a $158,000 increase in advertising expenditures, would increase annual unit sales by 40%. 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.) 3-b Would you recommend that the company do as the sales manager suggests? multiple choice - Yes