Please help with answers asap **Contribution Format Income Statement Analysis for PEM, Inc.****Background:**Due to erratic sales of its sole product—a high-capacity battery for laptop computers—PEM, Inc. has been experiencing financial difficulties. Here is the contribution format income statement for the most recent month:- **Sales (19,500 units x $30 per unit):** $585,000- **Variable Expenses:** $409,500- **Contribution Margin:** $175,500- **Fixed Expenses:** $180,000- **Net Operating Loss:** $(4,500)**Required Analysis:**1. **Contribution Margin (CM) Ratio and Break-even Point:** - Compute the company's CM ratio. - Determine break-even point in unit sales and dollar sales.2. **Impact of Increased Advertising Budget:** - Evaluate the president's proposal to increase the advertising budget by $16,000, estimating an $80,000 increase in monthly sales.3. **Sales Price Reduction and Advertising Increase:** - Analyze the sales manager's proposal to reduce the selling price by 10% and increase the advertising budget by $60,000, which could potentially double unit sales.4. **New Packaging Proposal:** - Assess the impact of a new packaging cost increase of 75 cents per unit, considering the needed sales volume to reach a profit target of $9,750.5. **Automation Proposal:** - Consider the automation impact of reducing variable expenses by $3 per unit, with a $72,000 increase in fixed expenses.**Additional Analysis:** a. Calculate the new CM ratio and break-even point for unit sales and dollar sales. b. Prepare two income statements based on the assumption of 26,000 units sold next month: - One statement without automation. - One with automation. Compare data on a per-unit and percentage basis, as well as total figures.c. Provide a recommendation regarding automation based on the anticipated sales volume of 26,000 units.**Instructions:**Complete this analysis by entering your calculations in the appropriate sections provided.

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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 (19,500 units x $30 per unit) Variable expenses Contribution margin Fixed expenses $ 585,000 409,500 175,500 180,000 $ (4,500) 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 $16,000 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in an $80,000 increase in monthly sales. 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 $60,000 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 75 cents per unit. ASsuming no other changes, how many units would have to be sold each month to attain a target profit of $9,750? 5. Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $72,000 each month. a. 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 26,000 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.) E. Would you recommend that the company automate its operations (Assuming that the company expects to sell 26,000)?