QUESTION 3 Andes is a snow evacuating equipment manufacturing company in the Scandinavian with a branch in Ghana responsible for marketing and distributing it products in faraway South Africa where as a result of the seemingly cold climate the weather falls below the solidification point of water causing traces of snow in the southern part of the country. The management accountant of the company was charged with the responsibility to produce a statement of income for the year just ended to enable policy to be made on what level of sales the company will break-even the coming period using the drafted income statement as a guide for the future. A summary of profit statement for its financial year, when it is operating at 90% of capacity is given below. GHS GHS Sales 20,000units Less: Direct materials 80,000 Direct wages 120,000 Production overhead: Fixed 44,000 Variable 20,000 320,000 1995 Gross profit Less: Administration, selling & distribution cost: Fixed 40,000 Varying with sales volume 60,000 Net profit ? Required: a) Complete the income state above b) Establish the Break Even c) What is the Variable cost of the company at the breakeven point d) Management plans to operate at full capacity, estimate the margin of safety of the company (2 marks) (10 marks)