Memofax , Inc. produces memory enhancement software for computers . Sales have been very erratic , with some months showing a profit and some months showing a loss . The company's contribution format income statement for the most recent month is given below Sales ( 15,500 units ) Less : Variable expenses Contribution margin Less : Fixed expenses Net operating loss $ 310,000232,500 77,50088,500 $ ( 11,000 ) Required : 1. Compute the company's CM ratio and its break - even point in both units and dollars . ( Do not round intermediate calculations . Round your " Break - even point in units " answer up to nearest whole number . ) % Contribution margin ratio Break - even point in units Break even point in dollars 2. The sales manager feels that an $ 15,000 Increase in the monthly advertising budget combined with an intensified effort by the sales staff , will result in a $ Increase in monthly sales . If the sales manager is right , what will be the effect on the company's 105, 000