Alpine Manufacturing produces metal picture frames.The company's income statements for the last two years are presented below:

Last year

This year

Units sold

50,000

70,000

Sales

$800,000

$1,120,000

Less: Cost of goods sold

550,000

710,000

Gross margin

250,000

410,000

Less: Operating expenses

150,000

190,000

Net income

$100,000

$220,000

Required:

Estimate the company's total variable cost per unit, and its total fixed costs per year. (Hint: This question has its highs and lows to consider for both operating expense and COGS.Last year seems low compared to a high this year...)

Prepare the company's contribution margin format income statement for next year assuming sales of 80,000 units.Make sure to itemize the different expenses under their appropriate headings.