Coffee Perfection, Inc. makes two products - Dream Coffee Machine and Out-Of-This-World Coffee Machine. Selected information on the products is given below: | Dream Coffee Machine | Out-Of-This-World Coffee Machine Selling Price per unit: $1,000.00 $5,000.00 Variable expenses per unit: Production $490.00 $4,000.00 Commission (5% of selling price) $50.00 $250.00 The company has the following fixed costs: Fixed production costs Advertising expense Administrative salaries Per Month $650,000 1,000,000 400,000 2.050.000 Total: Sales, in units, over the past two months have been as follows: Dream Coffee Machine Out-Of-This-World Coffee Machine Total February (units sold) 20,000 5,000 25,000 March (units sold) 15,000 6,000 21,000 Required: 1. Prepare contribution income statements for February and March. Use Exhibit 5-4 on page 211 as an example. 2. Compute the company's break-even point (BEP) in dollar sales for February and March. 3. To meet customer demand the company decides to use new technology for the Out-Of-This-World Coffee Machine starting in the month of April. This decision drives the production cost to $4,500 per unit. Prepare a contribution income statement for April assuming that the company had the following sales activity: Required: 1. Prepare contribution income statements for February and March. Use Exhibit 5-4 on page 211 as an example. 2. Compute the company's break-even point (BEP) in dollar sales for February and March. 3. To meet customer demand the company decides to use new technology for the Out-Of-This-World Coffee Machine starting in the month of April. This decision drives the production cost to $4,500 per unit. Prepare a contribution income statement for April assuming that the company had the following sales activity: | Dream Coffee Machine Out-Of-This-World Coffee Machine Total April (units sold) 10,000 10,500 20,500 4. Compute the company's break-even point in dollar sales for April. 5. Assume that in addition to the cost structure change in April, the Sales Department is requesting a switch from commission compensation to salary compensation to become effective in May. This will eliminate the commission variable cost but will create additional fixed cost of $1,900,000. The activity level and the cost structure outside the commission-salary conversion will remain consistent with April data (requirement 3). Prepare a contribution income statement and compute the break-even point in dollar sales for the new cost structure (use the data given in instructions 3 & 5). 6. The CFO of the company assigns you to research the following two issues: To analyze the impact on the break-even point in instructions 3 and 5. Do you support the decisions made? Why or why not. Perform an analysis on the current and proposed sales compensation structure. What strategies can be implemented in the sales commission structure to result in increased profits and efficiency for the company? Write an official memo to the president of the company to disclose your findings and possible recommendations