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Based on the information given I need help solving the rest of this problem. Problem 3 Cascade Company estimated the following variable and fixed cost
Based on the information given I need help solving the rest of this problem.
Problem 3 Cascade Company estimated the following variable and fixed cost for the only product it produces. Variable Cost Per Unit Fixed Cost Direct Materials Direct Labor Factory Overhead Sales Salaries and Commissions 132.30 115.30 24.50 12.70 0.00 0.00 6.70 0.00 6.30 2.20 264,000 245,000 75,000 39,500 24,500 220,000 15,000 17,000 Travel Misc. Selling Expenses Office and Officers Salaries Supplies Required: Prepare an Estimated Contribution Margin Income Statement for the year ended Dec. 31, 2012. (Assume that 6,000 units are to be produced and sold). Assume the estimated sales price wil be $500 per unit. Include one category for variable cost and one category for fixed cost. 2. Compute the break even point in units and sales dollars. 3. Compute the break even point in units and sales dollars assuming the changed facts below: The sales staff will now handle all of the advertising, removing this department and expense from the company and their commission will be increased to 10% of every sales dollar. Remember, the sales price unit is $500. The sales staff will also have their fixed salaries decease by $100,000. All other facts will remain unchanged 4. Which alternative would you select assuming that Cascade will sell at least 5,000 units? Why? 5. Referring to the original facts; what is the required sales in units and dollars required to generate a 12% Operating income as a % of SalesStep by Step Solution
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