Paragraph Coffee Perfection, Inc. makes two products- Dream Coffee Machine and Out-Of This- Machine. Selected information on the products is given below Dream Coffee Machine Out-Of-This-World $1,000.00 Selling Price per unit: Variable expenses per unit: Production Commission (5% of selling price) $490 00 $50.00 The company has the following fixed costs: Per Month Fixed production costs Advertising expense Administrative salaries Total 1,000,000 400.000 2050.000 O Sales, in units, over the past two months have been as follows: Dream Coffee Machine Out-Of-This-World Coffee Mac February (units sold) March (units sold) 5,000 6,000 15,000 Required: 1. Prepare contribution income statements for February and March. Use Exhibit 5-4 on page 211 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-W Machine starting in the month of April. This decision drives the production cost to $4,500 per uni contribution income statement for April assuming that the company had the following sales actizit Case 1 ACC 102 19SP (1)-Word OUT REFERENCES MAILINGS REVIEW VIEW DESIGN LAYOUT A Aa- ABLE TOOLS ,E- TNormal 11No Spac- Heading 1 Heading 2 Title Paragraph Styles Sales, in units, over the past two months have been as tollows February(unts sold) March (units sold) Dream Coffee Machine 20,000 15,000 Out-Of This-World Coffee Machine Total 25,000 21,000 5,000 6,000 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 Dream Coffee Machine 10,000 Out-Of-This-World Coffee Machine Total 20,500 LApil (units sold) 10,500 4. Compute the company's break-even point in dollar sales for Apmil 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 st but will create additional fixed cost of $1,900,000. The activity level and the cost e 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 assigas 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 decissons made? Why or why not. Perform an analysis on the current and proposed sales compensation structure. Whas strategies can be Paragraph Coffee Perfection, Inc. makes two products- Dream Coffee Machine and Out-Of This- Machine. Selected information on the products is given below Dream Coffee Machine Out-Of-This-World $1,000.00 Selling Price per unit: Variable expenses per unit: Production Commission (5% of selling price) $490 00 $50.00 The company has the following fixed costs: Per Month Fixed production costs Advertising expense Administrative salaries Total 1,000,000 400.000 2050.000 O Sales, in units, over the past two months have been as follows: Dream Coffee Machine Out-Of-This-World Coffee Mac February (units sold) March (units sold) 5,000 6,000 15,000 Required: 1. Prepare contribution income statements for February and March. Use Exhibit 5-4 on page 211 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-W Machine starting in the month of April. This decision drives the production cost to $4,500 per uni contribution income statement for April assuming that the company had the following sales actizit Case 1 ACC 102 19SP (1)-Word OUT REFERENCES MAILINGS REVIEW VIEW DESIGN LAYOUT A Aa- ABLE TOOLS ,E- TNormal 11No Spac- Heading 1 Heading 2 Title Paragraph Styles Sales, in units, over the past two months have been as tollows February(unts sold) March (units sold) Dream Coffee Machine 20,000 15,000 Out-Of This-World Coffee Machine Total 25,000 21,000 5,000 6,000 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 Dream Coffee Machine 10,000 Out-Of-This-World Coffee Machine Total 20,500 LApil (units sold) 10,500 4. Compute the company's break-even point in dollar sales for Apmil 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 st but will create additional fixed cost of $1,900,000. The activity level and the cost e 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 assigas 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 decissons made? Why or why not. Perform an analysis on the current and proposed sales compensation structure. Whas strategies can be