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1) Travelers Aids most recent Income statement followsTotal Per Unit Sales (3000 units) $90000 $30.00 Variable expenses $54000 $18.00 Contribution Margin $36000 $12.00 Fixed expenses $22000 Net operating income $14000Prepare a new contribution format income statement under the following condition: The sales volume increased by 150 units. (New sales are 3150 Units)2) Housewares Inc. distributes a single product food processors whose selling price is $200 and whose variable cost is $140 per unit. The company s monthly fixed expense is $18000. A) What is the company s breakeven point in unit sales using the equation method? Show computations. B) What is the company s breakeven point in sales dollars using the contribution margin method with the CM ratio? Show computations.3) Strong wood company is a distributor of patio furniture. Data concerning the next month s budget appear belowSelling price $290 per unitVariable expense $174 per unitFixed expenses $158000 per monthUnit sales 1500 units per monthA) What is the company s margin of safety? Show computations.B) What is the company s margin of safety as a percentage of sales? Show computations.4) Sharpens inc. produces knife sets for use in commercial kitchens. They sell them for $400 each. Selected data for the company s operations last year follow.Units in beginning inventory 0Units produced 3000Units sold 2500Units in ending inventory 500Variable cost per unit:Direct materials $120Direct Labor 80Variable manufacturing overhead 40Variable selling administrative 20Fixed costs:Fixed manufacturing overhead $300000Fixed selling and administrative $200000A) Assume that the company uses variable costing. Compute the unit cost for one knife set. Show computations.B) Assuming that the company uses absorption costing compute the unit cost for one knife set. Show computations.5) Soccer nets used for professional games they sell them for $200 each. Selected data for the company s operations last year follow:Units in beginning inventory 0Units produced 500Units Sold 300Units in ending inventory 200Variable costs per unit:Direct materials $75Direct labor 30Variable manufacturing overhead 10Variable selling and administrative 5Fixed costs:Fixed Manufacturing overhead $2000Fixed selling and administrative $1000A) Assume that the company uses variable costing. Compute the net operating income. Show computations.B) Assuming that the company uses absorption costing compute the net operating income. Show computations.

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