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Problem 18-5A (25 POINTS) Winston Corporation has collected the following information after its first year of sales of 100,000 units, Sales $1,600,000 $96,000 $104,000 $514,000

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Problem 18-5A (25 POINTS) Winston Corporation has collected the following information after its first year of sales of 100,000 units, Sales $1,600,000 $96,000 $104,000 $514,000 $270,800 $56,000 $124,000 $263,200 $112,200 Variable Selling expenses Fixed Selling expenses Direct materials Direct labor Variable administrative expenses Fixed administrative expenses Variable Manufacturing overhead Fixed Manufacturing overhead (a) Compute the total fixed costs and the total variable costs for the current year. Fixed Costs Variable Costs b) Compute the contribution margin per unit, contribution margin ratio and contribution in dollars for the current year. Contribution margin per unit Contribution margin ratio Contribution margin in dollars Compute the break-even point in units and sales dollars for the current year using the contribution margin method. (Round intermediate calculations to 2 decimal places e.g. 2.25) Break-even point in units Break-even point in dollars (d) The company has a target net income of $206,000. What is the required sales in dollars for the company to meet its target? (Round answer to 0 decimal places. eg 1 Sales dollars required for target net income (e) If the company meets its target net income number, calculated above, by what percentage could its sales fall before it is operating at a loss? That is, what is its margin of safety in dollars and what is the margin of safety ratio? (Round answer to 1 decimal place, e.g. 1o.b Margin of safety in dollars Margin of safety ratio () Top management has asked you to do a CVP Income Statement for the current year and for the next year. In the next year, management has projected that unit will increase by 10%. Assume all fixed costs remained the same in the projected next year (g) What is the Operating Leverage for the current year and for the projected next year

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