Question Four: (20 marks) (B1, D4)

Part A: (12 marks)

Ahlia Industries developed the following information for the product it sells:

Sales price $50 per unit

Variable cost of goods sold $28 per unit

Fixed cost of goods sold $650,000

Variable selling expense 10% of sales price

Variable administrative expense $2 per unit

Fixed selling expense $400,000

Fixed administrative expense $300,000

For the year ended December 31, 2021, Ahlia produced and sold 100,000 units of product.

Instructions

1. Prepare a CVP income statement using the contribution margin format for Ahlia Industries for 2021. (8 marks)
2. What was the company's break-even point in units in 2021? (4 marks)