Benoit Manufacturing Company manufactures and sells parts for various musical gadgets. The following information to a single part which is used in the production of a wind instrument. The business...

Benoit Manufacturing Company manufactures and sells parts for various musical gadgets. The following

information to a single part which is used in the production of a wind instrument. The business earned

Operating Income of $220,000 in 2019, when production was 3,000 units and the president of Darius is under

pressure from shareholders to increase operating income in 2020 and is therefore considering the

implementation of strategies mainly geared at increasing revenues and or decreasing variable costs. Data for

variable cost per unit and total fixed costs were as follows:
Variable expenses per unit: Direct Material $58
Direct Labour $74
Variable Manufacturing Overhead $48
Fixed expenses: Fixed Manufacturing Overhead $215,000

Fixed Selling Costs $65,000
Fixed Administrative Costs $160,000
Required:
a) Compute the selling price per unit in 2019, using the equation method.

b) Given the sales of 3,000 units and the selling price calculated in (a), prepare a contribution margin

income statement for the year ended December 31, 2019, detailing the components of total fixed costs

and clearly showing contribution and net income.