5. refer to the original data. by automating, the company could reduce variable expenses by $3 per unit. however, fixed expenses would increase by $53,000 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 20,300 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 20,300)?

Sailcloth & more currently produces boat sails and is considering expanding its operations to include awnings for homes and travel trailers. the company owns land beside its current manufacturing facility that could be used for the expansion. the company bought this land 5 years ago at a cost of $319,000. at the time of purchase, the company paid $24,000 to level out the land so it would be suitable for future use. today, the land is valued at $295,000. the company has some unused equipment that it currently owns valued at $38,000. this equipment could be used for producing awnings if $12,000 is spent for equipment modifications. other equipment costing $490,000 will also be required. what is the amount of the initial cash flow for this expansion project?