. Team-Building Supplies Systems, Inc. anticipates a number of important marketing initiatives for the next year. Before the fiscal year gets underway, company executives have decided to restructure the product marketing team into two separate groups: (1) Corporate Systems and (2) Home Systems. The Home Systems group would market the companys products for home and office-at-home use by individuals through office equipment dealers. The Home Systems marketing plan included a sales forecast for next year of $25 million. Sales representatives would receive a 15 percent commission on sales of home team-building products. Under the new organization structure, the Home Systems group would be charged with 40 percent of the total budgeted sales force expenditures because the sales director indicated that 40 percent of the companys sales force would be dedicated to selling products of the Home Systems group. The sales directors budget for salaries and benefits of the sales force and other non-commission selling costs for both the Corporate and Home Systems groups was $7.5 million. The advertising and promotion budget for the Home Systems group contained three elements: trade magazine advertising, cooperative newspaper advertising with office equipment dealers, and sales promotion materials including product brochures, catalogs, and point-of-purchase displays. Marketing materials were developed by the companys advertising agency with production and media placement costs budgeted at $300,000. Cooperative advertising production costs had been budgeted at $100,000; furthermore, the companys cooperative advertising allowance policy stated that that it would allocate 5 percent of company sales to dealers in exchange for the dealers promoting its products. Dealers always used their complete advertising allowances so this also needed to be accounted for in the budget. Meetings with operations personnel indicated that the direct costs of materials and labor and direct factory overhead to produce the Home Office Systems product line represented 50 percent of sales. The accounting department would assign $600,000 in indirect manufacturing overhead (for example, depreciation, maintenance) to the product line and another $300,000 for administrative overheads (clerical support, telephones, office space, etc.). Freight/delivery for the product line would average 8 percent of sales.

a. Prepare a pro forma income statement for the Home Systems group using the information provided.

b. Prepare a pro forma income statement for the Home Systems group given annual forecasted sales of only $20 million.

c. At what level of dollar sales will the Home Office Systems group break even? [Hint: add up the companys variable cost percentages and use the information to calculate a percentage contribution margin. Divide the percentage contribution margin into the expected fixed costs to calculate a breakeven dollar volume.

if you could please explain how to get to the answers as well i would greatly appreciate it.