Your Company, Inc. distributes a rocking chair that it sells for $15 per unit. Variable costs are $7 per unit and fixed expenses are $200,000. Last year's operating results are Sales $450,000, Variable Expenses $210,000, Contribution Margin $240,000, Fixed Expenses $200,000, and Net Operating Incomes $40,000. Required: (1) What is the products CM Ration. (2) Use the CM ratio to calculate the break-even point in sales dollars. (3) Due to an increase in demand, the company estimates that sales will increase by $1000,000 during the next year. By how much should net operating income change? (4)(a) Compute the degree of operating leverage at last years level of sales. (b) If the president expects sales to increase by 25% next year, by what percentage should net operating income increase? (5) Please refer to the original data: assume that You Company, Inc. sikd 30,000 units last year. A proposal has been made to reduce the selling price per unit by 10% and increase advertising expenditures by $40,000 which would result in an increase in units by one third. Prepare a contribution format income statement - would you recomend that the proposal be implemented? (6) Please refer to the original data: assume Your Company, Inc. Sold 30,000 units last year. A proposal has been made to keep the selling price the same but to increase the sales commissions by $1 per unit and increase the advertising expenditures; this should increase sales by 25%. Use incremental analysis to determine how much advertising expenditures could be increased with profits remaining unchanged.