Frieden Compiny's contribution format income statement for the most recent month is given below. The industry in which Frieden Company operates is quite sensitive to cyclical movements in the economy. Thus, profits vary considerably from year to year according to general economic conditions. The company has a large amount of unused capacity and is studying ways of improving profits. Required: 1. New equipment has come on the market that would allow Frieden Company to automate a portion of its operations. Variable expenser would be reduced by $7.80 per unit. However, fixed expenses would increase to a total of $631,800 each month Prepsre two contribution format income statements: one showing present operafions, and one showing how operations would appear if the new equipment were purchased. (tnput all nmounts as positive values except losses which should be indicated by minus sign. Round your "Per unit" onswers to 2 decimal ploces.) 2. Refer to the income statements in Requirement (1) above For both present operasons and the proposed new operations, Compite a. The degree of operating leverage. b. The breokeven point in dollars 6. The morgin of sufery in bott dolar and perceraget terins c. The margin of safety in both dollar and percertage terms 3. Refer again to the data in Requirement (1) above. As a manages, what factor would be paramount in your mind in deciding whether Reserves and surplus of the compariy Cyclical movernents in the econorny Performance of peers in the industry Stock level mainaned c. The margin of safety in both dollar and percentage terms. 3. Refer again to the data in Requirement (i) above. As a manager. what foctor would be paramount in your mind in deciding whether to purchase the new equipment? (Assume that ample funds are avalable to make the purchase) Reserves and surplus of the company Cyctical movements in the economy Performance of peers in the industry Stock level maintained 4. Refer to the original data. Rather than purchase new equipment, the marketing manager aroues that the company's makketing strategy should be changed Instead of paying sales comimissions, which are included in variable expenses, the marketing manager suggests that salespeople be paid foxed salaries and that the compuny itivest heavily in advertising. The maketing managet claims that this new approach would inctease unit sales by 509 without any change in seling price the company/ new monthly fixed expenses would be $351,000; and its net operating income would increase by 254 . Compute the break-even point in dollar sales tos the company under the new marheting strateay. Do you agree with the marketing manager s proposal