Reference no: EM132580300
Best Way Ltd manufacture and sell a single product. The following information is available for three financial years ending 31 December.
Sales Price per unit Unit volume
Actual 2018 135.00 60,000.00
Forecast 2019 138.00 62,000.00
Forecast 2020 139.00 63,000.00
Actual Forecast
Cost per unit 2018 ($) 2019 ($) 2020 ($)
Direct materials 55 56 56
Direct labour 35 37 38
Variable production overhead 12 13 14
Direct expese 6 6 7
Variable sales overhead 17 18 18
Fixed production overhead 60,000 58,000 58,000
Other fixed overhead 210,000 230,000 230,000
Question (a) Calculate break-even point in sales units and dollars for 2018, 2019 and 2020.
Question (b) Prepare forecast income statement for 2019 and 2020 in contribution margin format