Please help with question 5b !!! Please help with question 3 !!! Due to erratic sales of

Please help with question 5b !!!Please help with question 3 !!!

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Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Inc., has been experiencing financial difficulty for some time. The company's contribution format income statement for the most recent month is given below: Sales (13,400 units x $30 per unit) Variable expenses Contribution margin Fixed expenses Net operating loss Required: 1. Compute the company's CM ratio and its break-even point in unit sales and dollar sales. 2. The president believes that a $6,600 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 sales. The new package would increase packaging costs by $0.40 per unit. Assuming no other changes, how many units would have to be sold each month to attain a target profit of $4,700? 5. 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. b. Assume that the company expects to sell 20,600 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 20,600 units)? $ 402,000 201,000 201,000 223,500 $ (22,500) Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Sales Variable expenses Contribution margin Fixed expenses Net operating income Req 4 $ 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 20,600 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.) Total S 618,000 $ 309,000 309,000 $ 223,500 85,500 Req 5A PEM, Inc. Contribution Income Statement Not Automated Per Unit 30 15 15 < Req 5A % Req 5B 100 % 50 % 50 % $ $ Total Req 5C 618,000 Automated Per Unit $ 30 618,000 $ 280,500 337,500 Req 5C > 30 % 100 % % 100 % Show less Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Inc., has been experiencing financial difficulty for some time. The company's contribution format income statement for the most recent month is given below: Sales (13,400 units x $30 per unit) Variable expenses Contribution margin Fixed expenses Net operating loss Required: 1. Compute the company's CM ratio and its break-even point in unit sales and dollar sales. 2. The president believes that a $6,600 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 sales. The new package would increase packaging costs by $0.40 per unit. Assuming no other changes, how many units would have to be sold each month to attain a target profit of $4,700? 5. 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. b. Assume that the company expects to sell 20,600 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 20,600 units)? $ 402,000 201,000 201,000 223,500 $ (22,500) Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Sales Variable expenses Contribution margin Fixed expenses Net operating income Req 4 $ 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 20,600 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.) Total S 618,000 $ 309,000 309,000 $ 223,500 85,500 Req 5A PEM, Inc. Contribution Income Statement Not Automated Per Unit 30 15 15 < Req 5A % Req 5B 100 % 50 % 50 % $ $ Total Req 5C 618,000 Automated Per Unit $ 30 618,000 $ 280,500 337,500 Req 5C > 30 % 100 % % 100 % Show less

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To solve question 5b we need to prepare two contribution format income statements one assuming that operations are not automated and one assuming that they are Well calculate the data on a per unit an... View the full answer