1 (25 marks) LABMASK Inc. manufactures washable masks which sell for $45 each. At present, the mask is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totalling $27 per mask, of which 60% is direct labor cost. Last year, the company sold 30,000 of these masks, with the following results: Sales (30,000 masks) Variable expenses Contribution margin Fixed expenses Net operating income Required: $1,350,000 810,000 540,000 450,000 $ 90,000 (Round your computation to one decimal place, where applicable) (iii) Assume the new plant is built and that next year the company manufactures and sells 30,000 masks (the same number as sold last year). Prepare a projected contribution format income statement for next year. Show data on a total, per unit and percentage basis. (5 marks) (iv) If you were a member of top management, would you have been in favour of constructing the new plant? Explain. (6 marks) [Total for Question 1: 25 marks]