1. Compute the target profit break-even point assuming that management wishes to earn the following profit levels:

Products	Target Profit
Birdhouse	$6,000
Porch swing	$12,000
Freestanding hammock	$8,000

6. During the month of August, the company manufactures and sells the following:

Products	Qty
Birdhouse	230
Porch swing	90
Freestanding hammock	88

Prepare a contribution margin income statement assuming that fixed selling and administrative expenses are $5,300.

7. While management has extensive knowledge of woodworking and manufacturing, they have no background in accounting or finance. Prepare a memo to management (two-page minimum) to explain your findings from the CVP analysis performed above.

Be sure to include the following elements:

• Key findings related to contribution margin ratios, break-even points, and target profit.
• Using CVP analysis to better understand cost behavior and maximize profitability.
• Conclusions related to current staffing and future staffing considerations.
• Using CVP analysis to make better sales-mix decisions.
• Applying CVP concepts in scenarios of constrained resources such as labor or equipment.
• Implementing CVP to improve pricing decisions.
• Incorporating CVP into capital investment decisions