Question 1 (5 Marks) Marine International Company manufactures decorative iron railings. In preparing for next year's operations, management has developed the following estimates: Sales (20,000 Units) OMR 800,000 OMR 40 Direct Materials 300,000 15 Direct Labor (Variable) 50,000 2.50 Manufactuirng Overhead Variable 50,000 60,000 Selling and Administrative Overhead Variable 120,000 Fixed 50.000 Fixed You are required to 1. Prepare traditional Income Statement 2. Prepare Contribution Format Income Statement 3. Contribution Margin 4. Contribution Margin Ratio 5. Break Even Point in OMR Sales 6. Break Even Point in number of Units 7. Margin of Safety in OMR 8. Margin of Safety in Percentage 9. If Sales increase by 20%, with no changes in total fixed expenses, what will be the impact on the net operating income. 10. The company decide to improve the quality of the product, which results a 10% increase in the direct material cost and a 10% reduction in total selling and administrative fixed overhead. Because of the change, the total sale is expected to increase by 10%. Check the impact of the same on the total sales and profitability and recommend whether the change should be implemented or not? 11. If the per unit variable production costs increase by 15%, and if fixed selling and administrative expenses increase by 12%, what will be the new break-even point in dollar sales? 12. Degree of Operating Leverage 13. If the sale increase by 10% what will be the impact on net incomeet profit? (Calculate it using Degree of Operating Leverage)