Can you help me answer 5a and explain and show the math done.

break even point in units:

break even point in dollars:

Due to erratic sales of its sole producta high-capacity battery for laptop computersPEM, Inc., has been experiencing difficulty for some time. The companys contribution format income statement for the most recent month is given below:

Sales (12,500 units $20 per unit)	$	250,000
Variable expenses		150,000
Contribution margin		100,000
Fixed expenses		112,000
Net operating loss	$	(12,000)

Required:

1. Compute the companys CM ratio and its break-even point in both unit sales and dollar sales.

CM ratio 40%

Break even points in units 14,000

Break-even point in dollars $280,000

2. The president believes that a $6,500 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in an $83,000 increase in monthly sales. If the president is right, what will be the effect on the companys monthly net operating income or loss? (Use the incremental approach in preparing your answer.)

increases by 26,700

3. Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of $33,000 in the monthly advertising budget, will double unit sales. What will the new contribution format income statement look like if these changes are adopted?

Sales $450000

variable expense 300,000

contributin margin 150,000

fixed expenses 145,000

net operating income 5000

4. Refer to the original data. The Marketing Department thinks that a fancy new package for the laptop computer battery would help sales. The new package would increase packaging costs by $0.70 cents per unit. Assuming no other changes, how many units would have to be sold each month to earn a profit of $4,600? (Do not round intermediate calculations and round your final answer to the nearest whole number.)

sales units 16,000

5. Refer to the original data. By automating, the company could reduce variable expenses in half. However, fixed expenses would increase by $55,000 each month.

CM ratio 70%

break even point in units:

break even point in dollars:

a. Compute the new CM ratio and the new break-even point in both unit sales and dollar sales. (Use the CM ratio to calculate your break-even point in dollars. Round your final answers to the nearest whole number.)

b. Assume that the company expects to sell 20,300 units next month. Prepare two contribution format income statements, one assuming that operations are not automated and one assuming that they are.

c. Would you recommend that the company automate its operations?

	Yes
	No