please do subpart 5A-5C! thanks Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Incorporated, has been experiencingfinancial difficulty for some time. The company's contribution format income statement for the most recent month is given below:Sales (13,200 units x $20 per unit)Variable expensesContribution marginFixed expenses$ 264,000132,000132,000147,000$ (15,000)Net operating lossRequired:1. Compute the company's CM ratio and its break-even point in unit sales and dollar sales.2. The president believes that a $6,100 increase in the monthly advertising budget, combined with an intensified effort by the salesstaff, will increase unit sales and the total sales by $81,000 per month. If the president is right, what will be the increase (decrease) inthe 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$33,000 in the monthly advertising budget, will double unit sales. If the sales manager is right, what will be the revised net operatingincome (loss)?4. Refer to the original data. The Marketing Department thinks that a fancy new package for the laptop computer battery would growsales. The new package would increase packaging costs by $0.50 per unit. Assuming no other changes, how many units would haveto 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 expenseswould increase by $54,000 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 20,800 units next month. Prepare two contribution format income statements, oneassuming that operations are not automated and one assuming that they are. (Show data on a per unit and percentage basis, as wellas in total, for each alternative.)c. Would you recommend that the company automate its operations (Assuming that the company expects to sell 20,800 units)?Complete this question by entering your answers in the tabs below.Reg 1Reg 2Reg 3Reg 4Reg 5AReg 5BReg 50Refer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixedexpenses would increase by $54,000 each month. Compute the new CM ratio and the new break-even point in unit sales anddollar sales. (Do not round intermediate calculations. Round "CM ratio" to the nearest whole percentage (i.e., 0.234 shouldbe entered as "23") and other answers to the nearest whole number.)Show less A

Solution 5-a: Contribution margin (existing + $3) 13 / Sales price per unit 20 New…

ue to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Incorporated, has been experiencing nancial difficulty for some time. 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 $ 264, 000 132,000 132,000 147,000 $ (15,000) Net operating loss equired: