account- Frieden Company’s contribution format income statement

Refer to the original data. Rather than purchase new equipment, the marketing manager argues that the company’s marketing strategy should be changed. Instead of paying sales commissions, which are included in variable expenses, the marketing manager suggests that salespersons be paid fixed salaries and that the company invest heavily in advertising. The marketing manager claims that this new approach would increase unit sales by 50% without any change in selling price; the company’s new monthly fixed expenses would be $289,800; and its net operating income would increase by 25%. Compute the break-even point in dollar sales for the company under the new marketing strategy. (Omit the “$” sign in your response.)

Refer to the original data. By automating, the company could slash its variable expenses in half. However, fixed costs would increase by $121,000 per month.

Compute the new CM ratio and the new break-even point in both units and dollars. (Do not round intermediate calculations. Round your final answers to the nearest whole number. Omit the “%” and “$” signs in your response.)

Assume that the company expects to sell 20,100 units next month. Prepare two contribution format income statements, one assuming that operations are not automated and one assuming that they are. (Omit the “$” and “%” signs in your response.)