Given Values:

Units sold $($last year$)$:$200$ tables

Selling price per table:$$$$5,000$

Materials:

Mahogany:$$$$60/$sq ft $30$ sq ft $=$ $$1,800$ per table

Steel:$$$$20/$ft $10$ ft $=$ $$200$ per table

Other materials $($annual$)$:$$$$50,000$ total

Direct labor:

Wage:$$$$65/$hour

Time per table:$20$ hours

Labor cost per table:$6520=$ $$1,300$

Other expenses:

Owner salary $($supervision$)$:$$$$110,000/$year

Factory rent:$$$$10,000/$month $12=$ $$120,000/$year

Insurance:$$$$13,750$ per $6$ months $2=$ $$27,500/$year

Utilities:$$$$10/$direct labor hour $(20$ hours $200$ tables$)=$ $$40,000/$year

Distribution costs:

Warehouse rent:$$$$20,000/$year

Freight:$$$$100/$table $200=$ $$20,000/$year

Required:

Prepare a$$GAAP income statement

Prepare a$$Contribution format income statement

Compute$$product cost$$under:

Variable costing

Absorption costing

Compute$$Break$-$even sales:

In$$units

In$$dollars

Compute$$Margin of safety$($as a$$percentage$)$

Advise: What does a$75\%$ markup$$mean for the business's$$pricing decisions?