11 Stratford Company distributes a lightweight lawn chair that sells for $20 per unit. Variable expenses are 40% of sales and fixed expenses total $330,000 annually Required: Answer the following independent questions: 1. What is the product's CM per unit? 05:37 Conmuution man perunt Ook 2. Use the CM per unit to determine the break-even point in units Break-even point in units es 3. The company estimates that sales will increase by $70.000 during the coming year due to increased demand. By how botech should net operating income increase? Incense in operating income 4. Assume that the operating results for last year were as follows Sales Lt Variable expenses Contribution margin Less Fixed expenses Net operating Income $ 660,00 264.00 396,000 330,000 66,000 o. Compute the degree of operating leverage at the current level of sales. (Round your answer to 1 decimal place) Degree of operating everage b. The president expects sales to increase by 20% next year. By how much should net operating income increase? Increase in operating income 5-a. Refer to the original data. Assume that the company sold 35,000 units last year. The sales manager is convinced that a 3% reduction in the selling price, combined with a $138,000 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.) Last Year Per Unit Proposed Total Per Unit Total Sales