TIODIO 4-8 Basic Cost-Volume-Profit Analysis [LO1, LO3, LO4, LO5, LO8) Klein Company distributes a high-quality bird feeder that sells for $45 per unit. Variable costs are $18 per unit, and foxed costs total $420,000 annually Required: Answer the following independent questions 1. What is the product's CM ratio? CM ratio % 2. Use the CM ratio to determine the break-even point in sales dollars Break-even point in sales dollars 3. The company estimates that sales will increase by $54.000 curinGhe coming sear due to Increased demand. By how much should operating income increase? Operating income incrases by 2 of 8 Next a e to search 4. Assume that the operating results for last year were as follows: Sales Variable expenses $710,eee 206,e00 Contribution margin Fixed expenses 504,eee 420,000 Operating income $ 84,eee a. Compute the degree of operating leverage at the current level of sales. Degree of operating leverage b. The president expects sales to increase by 14% next year By how much should operating income increase? Operating income increases by O search