(Solved by Humans)-Problem 7-18 Basic CVP Analysis [LO1, LO3, LO4, LO5, LO8] Klein Company distributes a high-quality b

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Problem 7-18 Basic CVP Analysis [LO1, LO3, LO4, LO5, LO8] Klein Company distributes a high-quality bird feeder that sells for $25 per unit. Variable costs are $10 per unit, and fixed costs total $210,000 annually. Required: Answer the following independent questions: 1. What is the productAc€?cs CM ratio? (Omit the "%" sign in your response.)   ProductAc€?cs CM ratio % 2. Use the CM ratio to determine the break-even point in sales dollars. (Omit the "$" sign in your response.)   Break-even point in total sales dollars $  sales 3. The company estimates that sales will increase by $75,000 during the coming year due to increased demand. By how much should operating income increase? (Omit the "$" sign in your response.)   Operating income increase $    4. Assume that the operating results for last year were as follows:   Sales $ 500,000   Variable expenses 185,000   Contribution margin 315,000   Fixed expenses 210,000   Operating income $ 105,000 a. Compute the degree of operating leverage at the current level of sales.   Degree of operating leverage    b. The president expects sales to increase by 13% next year. By how much should operating income increase? (Omit the "$" sign in your response.)   Operating income increase $    5-a. Refer to the original data. Assume that the company sold 27,500 units last year. The sales manager is convinced that a 13% reduction in the selling price, combined with a $49,000 increase in advertising expenditures, would cause annual sales in units to increase by 20%. Prepare two contribution-format income statements, one showing the results of last yearAc€?cs operations and one showing what the results of operations would be if these changes were made. (Round Per Unit to 2 decimal places. Omit the "$" sign in your response.) Last Year: 27,500 units Proposed: 33,000 units Total Per Unit Total Per Unit   (Click to select)Fixed expensesContribution marginSalesVariable expensesCost of goods sold $    $    $    $      (Click to select)SalesContribution marginVariable expensesFixed expensesCost of goods sold               (Click to select)SalesVariable expensesContribution marginFixed expensesCost of goods sold    $       $      (Click to select)Cost of goods soldVariable expensesSalesFixed expensesContribution margin         (Click to select)Operating lossOperating income $    $    5-b. Would you recommend that the company do as the sales manager suggests? Yes No 6. Refer to the original data. Assume again that the company sold 27,500 units last year. The president feels that it would be unwise to change the selling price. Instead, he wants to increase the sales commission by $2 per unit. He thinks that this move, combined with some increase in advertising, would increase annual unit sales by 50%. By how much could advertising be increased with profits remaining unchanged? Do not prepare an income statement; use the incremental analysis approach.(Omit the "$" sign in your response.)   Expected total contribution margin $      Present total contribution margin      Incremental contribution margin, and the amount      by which advertising can be increased with      operating income remaining unchanged $