Assume that you are part of the accounting team far Gardon Productions. The company currently expects to sell 618 units for total revenue of $21,000 each month. Gordon Praductiens estimates direct materials cests af $3,150, direct labar costs of $4,200 variable overhead costs of 2,100, and variable selling and administrative costs of $1,050 Fixed costs of $8,500 are also expected which includes xed overhead and selling and administrative costs. Using this information complete the contribution margin Income statement shown beloW Gordon Productians Contribution Ma incame Statement 21,01141 | 10,500 Loss Variable costs10.500 . (-0.500) Contributlon margin10,500 Less: Fixed costs Operating income 2,000 Gordon Productions is examining cost behavlor patterns. Your recommendation is to first determine the break-even polnt In unlts. Flrst, calculate the contrlbution margin (CM) per unit (rounded to the nearest dollar) Next, complete the farmula below to determine the break-even units. Tatal Fixed Casts Contribution Margin per Unit Units 8,500 500 units APPLY THE CONCEPTS: Effect of Changes to Sales Price, Varlable Costs and Fixed Costs Now consider each of the following scenarios for Gordon Productions, Calculate the contribution margin (CM) per unit, rounded to nearest dollar, and the new break-even point in units, rounded to the nearest whole unit, for each scenaric separately. Scenario 1 Scenario 2 Scenario 3 Gordon will dispose of a machine in the factory. Thedetermined that a sales price increase of $2 per materials supplier. Changing suppliers will improve the depreciation on that equipment unit will not affect the sales volume and will be s $500 per month. CM per unit: After some extensive market research, Gordon has Gordon has been experiencing quality problems with a quality of the praduct but will cause direct materials costs to Increase by si per unlt. CM per unit: effective Immed ately. 17CM per unit: 19 18 X Break-even units: Break-even units: 553 X units Break-even units 583 X units units 618 X