Play and Stay Manufacturing(P&S) has a factory that produces cabinetry for the RV and marine market. The company has other product lines. Materials and labor for the cabinets are determined by each job. To simplify the assignment, we will assume the following average costs The following information highlights P&S Manufacturing's cost structure for 2020.

The materials include $2,800 for the wood and other materials on a per job basis.

It requires 24 hours of labor on average for the cabinetry. The hourly rate is $11.

The sales price will be set at a markup of 80%.

The company estimates that it will have 43,200 direct labor hours in total for the cabinets.

It assumes 1800 units are sold on average per year.

A breakdown of estimated yearly costs related to the cabinetry follows:

Salaries- office & administrative $ 500,000

Salaries for factory personal $ 350,000

Office Rent $ 150,000

Factory Rent $ 30,000

Office utilities and Misc office expenses(based on units sold) $ 15,000

Sales travel(based on units sold) $ 24,000

Insurance - office $ 12,000

Depreciation - office equipment $ 40,000

Depreciation for factory equipment $ 70,000

Advertising $ 20,000

Sales commissions(based on units sold) $ 50,000

Factory Property taxes $ 25,000

Maintenance for factory equipment $ 80,000

2. Create a new CVP Income Statement that reflects the following proposed changes. The company is considering a new supplier and some additional factory costs to increase quality and production levels. The new supplier will reduce direct material costs by 5%. The fixed costs will increase costs by 45%. With the expected increase in quality, the company believes that it can support a 3% increase in sales. The volumes used should be 1,800, 2,500 units and maybe more volumes