Please give a solution writing task of question 6&7.

Green Thumb, Inc. has a factory that produces custom greenhouses and other garden related items. It has multiple product lines. Materials and labor for the green houses are determined by each job. To simplify the assignment, we will assume the following average costs. The company estimates that it will have 30,000 direct labor hours in total for the green houses. The materials include $1,200 on a per job basis. It requires 15 hours of labor on average for a custom greenhouse. The hourly rate is $10. The sales price will be set at a markup of 75%. It assumes 2,000 units are sold on average per year. A breakdown of estimated yearly costs related to the greenhouses follows. Please note that the amounts are per year unless identified otherwise:

Salaries- office & administrative $600,000

Salaries for factory supervisors and janitors $120,000

Office Rent $120,000 Factory Rent $90,000

Office Utilities and Misc office expenses(based on units sold) $20,000

Sales Travel(based on units sold) $24,000 Insurance - office $14,000

Depreciation - office equipment $45,000

Depreciation for factory equipment $55,000

Advertising $100,000

Sales commissions(based on units sold) $80,000

Factory Property taxes $10,000

Maintenance for factory equipment $60,000

Question 6. Prepare three Cost Volume Profit (CVP) Income Statements using the following yearly volumes: 1,500,

2,000 and 2,400. Keep in mind how variable and fixed costs behave. The traditional income statement

from #5 should be about the same net income as the 2,000 units for the CVP format.

a) Calculate Break-even in units and sales $ for the company

b) Calculate units and sales $ if the company wants a profit of $1,000,000.

c) Margin of safety for 2,000 units.

Discuss the importance of these calculations to a company. Fully discuss the differences(at least 3)

between the traditional vs CVP format. Give examples supported by numbers of how you would use

these calculations as the CFO of the company.

Question 7. If the following changes were to be made, calculate a new CVP Income Statement: Direct Material costs

decrease by 10%; fixed costs increase by 50% and sales price would increase by 5%. Assume you are

selling the 2,000 units. Should the company consider these changes? Why or why not? This question is not just based on

the new net income. Please review the full income statement for changes. What if the sales volume

changes? Does this change your answer? I would recommend using volumes higher and lower to

see how the changes impact your answer. Include any CVP income statements that are needed to

support your answer.

Discuss real examples of cost increases for fixed costs (at least 2) and decreases for direct

materials (at least 2) that could be implemented for this business. Can the company increase price?

What other areas might be impacted due to the price increase? You are the CFO of this business

what is important to consider? Give 2 industry specific details that can impact this discussion.