Question E (20 points) Carbex, Inc., produces cutlery sets out of high-quality wood and steel. Th sells them to retail department stores throughout the country. The Standard set sells for $94, and the Deluxe set sells for $109. The variable expenses associated with each set are given below e company makes a Standard set and a Deluxe set and Standard Deluxe 32.0 47.0 Variable production costs 0.0 34.8 Sales cornmissions (32% of sales price) The company's fixed expenses each month are Advertising s 122.00 Depreciation S 26,800 Administrati S 71,500 Mary Parsons, the financial vice president, watches sales commissions carefully and has noted that they have risen steadily over the last year. For this re find that even though sales have increased, profits for the current month May-are down substantially from April. Sales, in sets, for the last two months are given below ason, she was shocked to April May 5,700 2.700 3,700 6,700 Total 9.400 9,400 Required 1. a) Prepare contribution format income statements for April. (5 points) b) Prepare contribution format income statements for May (5 points) 2. a) Compute the break-even point in dollar sales for April. (5 points) b)Would the break-even point in May be higher or lower than the break-even point in April? (5 points) stio int Sierra Company incurs the following costs to produce and sell its only product. Variable costs per unit: S 12 Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expenses Fixed costs per year: 126,00 Fixed manufacturing overhead Fixed selling and administrative 285,00 0 During this year, 31,500 units were produced and 24,250 units were sold. The Finished Goods inventory account at the end of this year shows a balance of S152,250 for the 7,250 unsold units. Required: 1. a) Calculate this year's ending balance in Finished Goods inventory two ways-using variable costing and using absorption costing. (5 points) b) Does it appear that the company is using variable costing or absorption costing to assign costs to the 7,250 units in its Finished Goods inventory? (2 points) 2. Assume that the company wishes to prepare this year's financial statements for its stockholders. a. Is Finished Goods inventory of S152,250 the correct amount to include on the balance sheet for external reporting purposes? (3 points) b. What balance should be reported in the Finished Goods inventory account for external reporting purposes? (5 points)