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CoursHeroTranscribedText: Due to erratic sales of its sole producta highvcapacity battery for laptop computersFEM. Inc. has been experiencing nancial difculty for some time. The company's contribution format income statement for the most recent month is given below: Sales (13,388 units x $33 per- unit) 9 399,338 Variable expenses 199,533 Contribution margin 199,533 Fitted expenses 222,338 Net: operating loss 5 (22,933) l Required: 1. Compute the company's CM ratio and its oreakeven point In unit sales and dollar sales. 2. The president believes that a $6.300 Increase In the monthly advertising budget. combined with an Intensified effort by the sales staff. will result In an $81000 increase in monthly sales. If the president is right. what will be the Increase {decrease} in the companyrs monthly net operating Income? 3. Refer to the original data. The sales manager is convinced that a 1096 reduction In the selilng price. combined with an Increase of $36,000 In the monthly advertising budget. will double unit sales. lfthe sales manager Is right. what will be the revised net operating income (loss)? 4. Refer to the original data. The Marketing Department thinks that a fancy new package for the laptop computer battery would grow sales. The new package would Increase packaging costs by $0.50 per unit. Assuming no other changes. how many units would have to be sold each month to attain a target profit of $4,300? 5. Refer to the Original data. By automating. the company could reduce variable expenses by $3 per unit. However. fixed expenses would increase by $51000 each month. a. Compute the nevi.I CM ratio and the new break-even point In unit sales and dollar sales. I}. "Some that the company expects to sell 21,000 units next month. Prepare two contribution format income statements, one assuming that operations are not automated and one assuming that they are. {Show data on a per unit and percentage basis. as well as In total. for each alternative.) c. Would you recommend that the company automate its operations [Assuming that the company expects to sell 21.000}? mummwmmmumhmmm ' m1 m2 ' m3 ' Reqd mass 12.an ms: Compute the company's CM ratio and Its break-even point in unit sales and dollar sales. (Do not round WW tabulations. Round '0'! ratio' to the nearest whole percentage (Le... 0.234 should be entered as '23").] CM ratio Break-even point in unit sales Break-even point in dollar sales Wwemltymaogmemlnthenhm. m3 Reg-1 ReqSA ' 9.56153 ReqSC Theoreeidert believesdiatasjoo irmase in themaiiily advertising budget. combinedwitan hitensied efforthythe saiessta'. will raswtinan $87,000 increase in rriontitly sales. lithe pmidentisright. whatwii! bodice increase (decrease) 'm the company's mthly netoperating income? {Do not round intermediate alcuiations.) Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Req 5A Req 5B Req 5C Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of $36,000 in the monthly advertising budget, will double unit sales. If the sales manager is right, what will be the revised net operating income (loss)? (Losses should be entered as a negative value.) Revised net operating income (loss) Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Reg 4 Req 5A Req 5B Req 5C Refer to the original data. The Marketing Department thinks that a fancy new package for the laptop computer battery would grow sales. The new package would increase packaging costs by $0.50 per unit. Assuming no other changes, how many units would have to be sold each month to attain a target profit of $4,300? (Do not round intermediate calculations. Round final answer to the nearest whole unit.) Show less A Unit sales to attain target profit Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Reg 4 Req 5A Req 5B Req 5C Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $57,000 each month. Compute the new CM ratio and the new break-even point in unit sales and dollar sales. (Do not round intermediate calculations. Round "CM ratio" to the nearest whole percentage (i.e., 0.234 should be entered as "23") and other answers to the nearest whole number.) Show less A CM ratio % Break-even point in unit sales Break-even point in dollar sales Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Reg 3 Reg 4 Req 5A Req 58 Req SC Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $57,000 each month. Assume that the company expects to sell 21,000 units next month. Prepare two contribution format income statements, one assuming that operations are not automated and one assuming that they are. (Show data on a per unit and percentage basis, as well as in total, for each alternative.) (Do not round your intermediate calculations. Round your percentage answers to the nearest whole number.) Show less A PEM, Inc. Contribution Income Statement Not Automated Automated Total Per Unit % Total Per Unit % 1% % % % Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Req 5A Reg 5B Req 5C Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $57,000 each month. Would you recommend that the company automate its operations (Assuming that the company expects to sell 21,000)? Yes ONo

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