Suppose that Amigo Company sells a product for $40. Unit costs are as follows:

Direct materials	$3.80
Direct labour	$2.80
Variable factory overhead	$4.20
Variable selling and administrative expenses	$3.20

Total fixed factory overhead is $108 840 per year and total fixed selling and administrative expense is $77 060.

Required:

1. Calculate the variable cost per unit and the contribution margin per unit.
2. Calculate the break-even units.
3. Prepare a contribution margin income statement at the break-even number of unit