PEM, Incorporated, is experiencing financial difficulty due to erratic sales of its only product, a high-capacity battery for laptop computers. The company's contribution format income statement for the most recent month is given below: Sales (13,200 units x $20 per unit) Variable expenses Contribution margin Fixed expenses Net operating loss Required: $264,000 132,000 132,000 147,000 $ (15,000) 1. Compute the company's CM ratio and its break-even point in unit sales and dollar sales. 2. The president believes a $6,100 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will increase unit sales and the total sales by $86,000 per month. If the president is right, what will be the increase (decrease) in the company's monthly net operating income? 3. Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of $39,000 in the monthly advertising budget, will double unit sales. If the sales manager is right, what will be the revised net operating income (loss)? 4. Refer to the original data. The Marketing Department thinks that a fancy new package for the laptop computer battery would grow