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i G-Force Manufacturing Company had net income of s300,oo0 in 2017 when the number of units produced and sold was 6,oo0 and data for variable
i G-Force Manufacturing Company had net income of s300,oo0 in 2017 when the number of units produced and sold was 6,oo0 and data for variable and fixed costs were as follows: Cost Schedule: Variable Costs: Direct Material Direct Labour Variable Manufacturing Overhead 535 s30 si5 Fixed Costs: Manufacturing Overhead $232,000 33.000 155,000 Cpute the selling price per unit in 2017, using the equation method. ii) Using the sales price per unit calculated in (i), prepare a contribution margin income statement for the year ended December 31, 2o17, detailing the components of total fixed costs, and clearly showing contribution and net income. iii) iv) v) Calculate G-Force's break-even point in units and in dollars Calculate the margin of safety in number of units and sales dollars. Using the production/sales of 6,ooo units, construct a breakeven Manufacturing Company, clearly showing the breakeven point and the margin of safety in units and dollars and the region representing profits and losses. [Use a scale of 2 cm to represent ,ooo units on the x axis and em to represent s2oo,ooo on the y axis]. chart for G-Force vi) The president of G-Force Manufacturing is under pressure from stockholders to increase operating inconne by 10% in 2018, Management expects per unit data and total fixed costs to remain the same in 2o18. Compute the number of units that must be sold in 2018 to reach the shareholders' desired profit level. Is this a realistic goal? vii) Assume that G-Force Manufacturing sells the same number of units in z018 as it did in 2017. Assuming unit variable costs and total fixed costs remain unchanged, what would the new selling price have to be in order to reach the stockholders' desired profit level
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