Stratford Company distributes a lightweight lawn chair that sells for $40 per unit. Variable expenses are 25% of sales, and fixed expenses total $768,000 annually.

Required: Answer the following independent questions:

1. What is the products CM per unit?

2. Use the CM per unit to determine the break-even point in units.

3. The company estimates that sales will increase by $65,000 during the coming year due to increased demand. By how much should net operating income increase?