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Prepare forecast income statement

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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

Reference no: EM132580300

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