Solomon Modems, Incorporated makes modem cards that are used in notebook computers. The company completed the following transactions during year 1. All purchases and sales were made with cash. 1. Acquired $890,000 of cash from the owners. 2. Purchased $340, 000 of manufacturing equipment. The equipment has a $44,000 salvage value and a four-year useful life. 3. The company started and completed 6,400 modems. Direct materials purchased and used amounted to $54 per unit. 4. Direct labor costs amounted to $39 per unit. 5. The cost of manufacturing supplies used amounted to $18 per unit. 6. The company paid $64,000 to rent the manufacturing facility. 7. Solomon sold all 6, 400 units at a cash price of $190 per unit. 8. The sales staff was paid a $13.00 per unit sales commission. 9. Paid $53,600 to purchase equipment for administrative offices. The equipment was expected to have a $4, 400 salvage value and a three-year useful life. 10. Administrative expenses consisting of office rental and salaries amounted to $80, 100. Required a. Use the following partially completed form to prepare an income statement using the contribution margin format. b. Determine the break-even point in units and in dollars. c. Assume that next year's sales are budgeted to be the same as the current year's sales. Determine the margin of safety expressed as a percentage.x Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Required C Use the following partially completed form to prepare an income statement using the contribution margin format. SOLOMON MODEMS, INCORPORATED Income Statement For the Year Ended December 31, Year 1 Sales revenue 1 216,000 Variable costs Direct materials $ 345,600 Direct labor 249,600 115.200 Administrative expenses 83.200 Total variable costs Contribution margin 422 400 Fixed costs: Depreciation on manufacturing equipment 74 000 Rent for manufacturing facility 64.000 Depreciation on administrative equipment 16,200 Administrative expenses 80 100 Total fixed costs 234 300 Net income $ 188. 109 Required B >Solomon Modems, Incorporated makes modem cards that are used in notebook computers. The company completed the following transactions during year 1. All purchases and sales were made with cash. 1. Acquired $890,060 of cash from the owners. 2. Purchased $340,600 of manufacturing equipment. The equipment has a $44,000 salvage value and a four-year useful life. 3. The company started and completed 6, 400 modems. Direct materials purchased and used amounted to $54 per unit. 4. Direct labor costs amounted to $39 per unit. 5. The cost of manufacturing supplies used amounted to $18 per unit. 6. The company paid $64,000 to rent the manufacturing facility. 7. Solomon sold all 6, 400 units at a cash price of $190 per unit. 8. The sales staff was paid a $13.00 per unit sales commission. 9. Paid $53,000 to purchase equipment for administrative offices. The equipment was expected to have a $4, 400 salvage value and a three-year useful life . 10. Administrative expenses consisting of office rental and salaries amounted to $80, 100. Required a. Use the following partially completed form to prepare an income statement using the contribution margin format. b. Determine the break-even point in units and in dollars. c. Assume that next year's sales are budgeted to be the same as the current year's sales. Determine the margin of safety expressed as a percentage. x Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Required C Assume that next year's sales are budgeted to be the same as the current year's sales. Determine the margin of safety expressed as a percentage. Note: Round intermediate calculations to nearest whole number and final answer to 2 decimal places. (i.e., ,2345 should be entered as 23.45) Show lessA Margin of safety expressed 34.88 %