1: 7 marks) Alyeska Manufacturing firm, a division of a major international firm, makes two types of industrial component parts the XY00 and the PT00. Data from the firm's accounting system appear below: XYOO PT00 Sales revenue (600 $800; 390 $1,700) $480,000 $663,000 Top managers' salaries 140,000 120,000 Supplies 60,000 90,000 Depreciation of special equipment 30,000 65,000 Allocated general overhead 40,000 70,000 Wages of workers assembling products 150,000 400,000 Gasoline and lubricating oils 20,000 14,000 Net operating income (loss) $40.000 $(96.000) The special equipment has no salvage value. Wages of workers assembling products. Supplies, gasoline and lubricating oils are variable costs with respect the number of parts produced, whereas top managers' salaries are fixed costs with regard to the number of parts produced. Mr. Ibrahim, CEO, is concerned about the continued losses shown by the PT00 and wants recommendation as to whether the production and sale of PT00 should be discontinued. Required a. If PT00 is discontinued, one managerial position could be avoided, saving the firm $60,000. Suppose that the company expects no change in sales revenue, what is the financial advantage (disadvantage) discontinuing PT00 rather than keeping it? (1 marks) b. Refer to the original data, If the manager, Mr. Ibrahim, discontinues the PT00, sales of XY00 would raise by 45%. By doing so, he can still avoid $60,000 in top managers' salaries. Special equipment currently used for the PT00 would be utilized by the XY00. Should the production and sale of PT00 be discontinued? Show your work. (3 marks) c. What additional factors should the manager consider before discontinuing the production and sale of PT00