Hello! Can you please help me to understand the 3 questions in the attached document (25, 26, and 27)? I am struggling with them. I have also attached the blank entry for reference Thank you so much in advance for your assistance!
\fQuestion 25 (5 points) Mathers Company had sales of $20,000 (200 units at $100 per). Manufacturing costs consisted of direct labor $1,600, direct materials $1,200, variable factory overhead $1,000, and fixed factory overhead $500. Selling expenses totaled $1,250 ($250 variable and $1,000 fixed), and administrative expenses totaled $1,600 ($410 variable and $1,190 fixed). Operating income was $12,850. Round all final answers to nearest dollar or whole number. Requirements: a. What is the break-even point in sales dollars and in units if the fixed factory overhead increased by $1,000? b. What is the break-even point in sales dollars and in units if costs remain as originally projected? c. What would be the operating income if sales units increased by 10%? Question 26 (5 points) Marshall Co. manufactures tote bags. The forecasted income statement for the year before any special orders included sales of $3,300,000 (sales price is $10 per unit.) Manufacturing cost of goods sold is anticipated to be $2,290,000. Selling expenses are expected to be $300,000, and operating income is projected at $710,000. Fixed costs included in these forecasted amounts are $1,300,000 for manufacturing cost of goods sold. ProCo is offering a special order to buy 30,000 tote bags for $6.00 each. There will be no additional selling expenses, and sufficient capacity exists to manufacture the extra tote bags. Requirements: Prepare an incremental analysis schedule to demonstrate what amount operating income would increase or decrease as a result of accepting the special order. Question 27 (6 points) Bowie Company manufactures 20,000 units of wheel sets for use in its annual production. Costs are as follows: direct materials are $40,000; direct labor is $50,000; variable overhead is $35,000; and fixed overhead is $70,000. Bieber Company has offered to sell Bowie 20,000 units of wheel sets for $10 per unit. If Bowie accepts the offer, some of the facilities presently used to manufacture wheel sets could be rented to a third party at an annual rental of $15,000. Additionally, $1.50 per unit of the fixed overhead applied to wheel sets would be totally eliminated. Requirements: Prepare an incremental analysis schedule to demonstrate if Bowie should accept Bieber's offer