5. The following information relates to Vice Versa Ventures for calendar year 20XX, the companys first year of operations. Units produced 20,000 Units sold 17,000 Selling price per unit $35 Direct material per unit $5 Direct labor per unit $5 Variable manufacturing overhead per unit $2 Variable selling cost per unit $3 Annual fixed manufacturing overhead $160,000 Annual fixed selling and administrative expense $80,000 (a) Prepare an income statement using full costing. (b) Prepare an income statement using variable costing. 6. Leekee Shipyards has a new barnacle-removing product for ocean-going vessels. The company invests $1,000,000 in operating assets and plans to produce and sell 200,000 units per year. Leekee wants to make a return on investment of 20% each year. Leekee needs to know what price to charge for this product. Use the absorption costing approach to determine the markup necessary to make the desired return on investment based on the following information. Per Unit Total Direct Materials $2.00 Direct Labor $1.50 Variable Manufacturing Overhead $1.00 Fixed Manufacturing Overhead $100,000 Variable Selling and Administrative Expense $0.10 Fixed Selling and Administrative Expense $100,000 1. Elliots Escargots sells commercial and home snail extraction tools and serving pieces. Currently, the snail extraction line of products takes up approximately 50% of the companys retail floor space. The CEO of Elliots wants to decide if the company should continue offering snail extraction tools or focus only on serving pieces. If the snail extraction tools are dropped, salaries and other direct fixed costs can be avoided and serving piece sales would increase by 13%. Allocated fixed costs are assigned based on relative sales. Snail Extraction Serving Tools Pieces Total Sales $1,200,000 $800,000 $2,000,000 Less cost of goods sold 1,000,000 700,000 1,700,000 Contribution margin 200,000 100,000 300,000 Less direct fixed costs: Salaries 175,000 175,000 350,000 Other 60,000 60,000 120,000 Less allocated fixed costs: Rent 14,118 9,882 24,000 Insurance 3,529 2,471 6,000 Cleaning 4,117 2,883 7,000 Executive salary 76,470 53,530 130,000 Other 7,058 4,942 12,000 Total costs 340,292 308,708 649,000 Net income ($140,292) ($208,708) $349,000 Prepare an incremental analysis in good form to determine the incremental effect on profit of discontinuing the snail extraction tool line