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  3. due to erratic sales of its sole product - a high-

Due to erratic sales of its sole product - a high-capacity battery for laptop computers...

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Question

Accounting

Due to erratic sales of its sole product - a high-capacity battery for laptop computers - Parkson
Company has been experiencing financial difficulty for some time. The company's
contribution format income statement for the most recent month is given below:
Required:
Compute the company's CM ratio and its break-even point in unit sales and dollar sales.
The president believes that a $16,000 increase in the monthly advertising budget, combined
with an intensified effort by the sales staff, will increase unit sales and the total sales by
$80,000 per month. If the president is right, what will be the increase (decrease) in the com
pany's monthly net operating income?
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