QUESTION 3 120 marks) (a) Fabulous Furniture Ltd purchased a new machine on! January 2016 for a total cost of $56 000. The machine has an estimated useful life of five years (200 000 units of production) and a residual value of S6 010. Requirements: Calculate depreciation expense for each year (2016 to 2020) using the straight-line method. (2 marks) Show how the machine would be disclosed in the Statement of Financial Position of Fabulous Furniture Ltd at the end of 2016 to 2020 inclusive, assuming that the straight-line method has been adopted. (3 marks) (b) Will Ltd is a manufacturer of timber outdoor chairs. Will Ltd makes only one type of timber outdoor chair. The data relating to 2020 is given below: Selling price per unit 569 Variable manufacturing costs per unit $38 Variable marketing costs per unit $13 Annual fixed manufacturing costs $150,000 Annual fixed non-manufacturing costs $93,000 Requirements: Calculate the break-even point in units. (3 marks) Calculate the break-even point in dollars. (2 mark) (in) If Will Ltd's actual sales in 2020 were 17,400 units, calculate the margin of safety in units. (3 mark) Gw) How many units would Will need to sell to earn a target profit of $90,000? (3 marks) If the variable marketing costs per unit increase by S2 and annual fixed manufacturing costs decrease to $143,000, how many units would Will Ltd need to sell to earn a target profit of $90,000? (4 marks)