ANSWER QUESTION SET #$2!$ Break Even Analysis Selling Price of Widget: Problem $1$: Break Even Analysis Selling Price of Widget: $$3\mathrm{.}00$ Cost of Goods Sold $($Material$)$ $$1\mathrm{.}00$ Assume that there are only material costs associated with the Cost of Goods Sold $($COGS$)$ That is$,$ there is no labor or other direct items associated with the manufacture of the product. For the purposes of this exercise I have classified direct labor in fixed costs. Fixed Costs $($Dir$.$ Labor, Overhead, SG&A$)$: $$30,000/$month Machinery & Equipment: $$240,000($Assume machinery and equipment is on books at $$240,000$ as of Jan$\mathrm{.}1$ with a $10$ vear useful life. For ease of calculation you can assume straight$-$line depreciation. You can assume it was an equity contribution made by the founder$)$ Question Set $1$: Calculate monthly profit break even Calculate the monthly cash break even Show work and use both the "total revenue $-$ total cost" approach and break even using the "fixed cost$/$contribution margin" formula. Problem $2$: Cash Flow & Income Assume that the selling price, material cost, fixed costs, equipment and depreciation are all the same as in Problem $1$ but with the following information: n $1)$ In order to be in business you must have a buffer of one month's worth of inventory on hand at all times. Therefore, since you begin business on Jan $19,$ you need to order $2$ months worth of inventory on Jan $1$st$,$ which you can pick up the next day cash on delivery $($COD$).2)$ You estimate that the amount of business you will do is the same for January and February and that amount is equal to the amount of units you need to reach profit break even the amount you calculated from Problem $1)3)$ You ship all the widgets throughout the month and get paid immediately when you ship or sell the widgets. Question Set $2$: Calculate your cash position at the end of January. Develop an Income Statement for January. Calculate the difference between the January cash generation$/$use versus profits. Note: For Question Sets $2$ and $3$ don't worry if you have negative balances in any asset accounts