M Bb (XM Bb M UCSC M iF + C A ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252... > Ch 5 HW - ACG3073 1 Saved Help Save & Exit Submit Check my work 18 Required information Part 2 of 2 [The following information applies to the questions displayed below.] This year Burchard Company sold 36,000 units of its only product for $16.20 per unit. Manufacturing and 15 selling the product required $121,000 of fixed manufacturing costs and $181,000 of fixed selling and points administrative costs. Its per unit variable costs follow. Material $ 4. 10 eBook Direct labor (paid on the basis of completed units) 3.10 Variable overhead costs 0 . 41 Print Variable selling and administrative costs 0. 21 References Next year the company will use a new material, which will reduce material costs by 70% and direct labor costs by 30% and will not affect product quality or marketability. Management is considering an increase in the unit selling price to reduce the number of units sold because the factory's output is nearing its annual output capacity of 41,000 units. Two plans are being considered. Under plan 1, the company will keep the selling price at the current level and sell the same volume as last year. This plan will increase income because of the reduced costs from using the new material. Under plan 2, the company will increase the selling price by 30%. This plan will decrease unit sales volume by 15%. Under both plans, the total fixed costs and the variable costs per unit for overhead and for selling and administrative costs will remain the same. 2. Prepare a forecasted contribution margin income statement with two columns showing the expected results of plan 1 and plan 2. The statements should report sales, total variable costs, contribution margin, total fixed costs, income before taxes, income taxes (30% rate), and net income. Mc Graw C A ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252... * Ch 5 HW - ACG3073 i Saved Help Save & Exit Submit Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion. Return to question 18 This plan will decrease unit sales volume by 15%. Under both plans, the total fixed costs and the variable costs per unit for overhead and for selling and administrative costs will remain the same. Part 2 of 2 2. Prepare a forecasted contribution margin income statement with two columns showing the expected results of plan 1 and plan 2. The statements should report sales, total variable costs, contribution margin, total fixed costs, income before taxes, income taxes (30% rate), and net income. 15 points X Answer is not complete. BURCHARD CO. Forecasted Contribution Margin Income Statement Plan 1 Plan 2 Number of units: 36,000 30,600 Sales $ 28,700 X Variable costs Contribution margin 28,700 0 Fixed costs Income before taxes 28,700 D Income taxes Net Income (loss) $ 28,700 $ 0 Mc Graw