Units produced 9,000 Units sold 7,000 Sales $ 100,000 Variable manufacturing costs are $ 4 per unit . Fixed manufacturing overhead totals $ 18,000 for the year . The fixed manufacturing overhead was applied at a rate of $ 2 per unit . Variable selling and administrative expenses were $ 1 per unit sold . Required : Prepare a new income statement for the year using variable costing . Comment on the differences between the absorption costing and the variable costing income statements . ( Points : 30 ) 6 . ( TCO I ) ( Ignore income taxes in this problem .) Simpson Beauty Products Corporation is considering the production of a new conditioning shampoo that will require the purchase of new mixing machinery . The machinery will cost $ 700,000 , is Required : Part A : What is the net present value of this investment opportunity ? Part B : Based on your answer to ( a ) above , should Simpson go ahead with the new conditioning shampoo ? ( Points : 30 ) PART B : Simpson should not go ahead and purchase the shampoo machine since the NPV is negative . 7 . ( TCO A ) The following data ( in thousands of dollars ) have been taken from the accounting records of Karmana Corporation for the just-completed year . 8 . ( TCO F ) Matuseski Corporation is preparing its cash budget for October . The budgeted beginning cash balance is $ 54,000 . Budgeted cash receipts total $ 127,000 and budgeted cash disbursements total $ 99,000 . The desired ending cash balance is $ 100,000 . The company can borrow up to $ 150,000 at any time from a local bank , with interest not due until the following month . Required : Prepare the company ' s cash budget for October in good form . Make sure to indicate what borrowing , if any , would be needed to attain the desired ending cash balance . ( Points : 25 ) 9 . ( TCO F ) Bella Lugosi Holdings , Inc . ( BLH ), has collected the following operating information for its current month ' s activity . Using this information , prepare a flexible budget analysis to determine how well BLH performed in terms of cost control .