2 Based on the income stafement prepared in (1) and the other data presented, determine the amount by which botal annual income trom coperations would be reduced beibiv its presant ievel it Proposal 2 is accepted. If a loss is incurred, enter that amount as a negutive number using a minus sion. from the fotal contribution margin, as reported in the Total" colum, to dotermine income from operations. Fefer to the lists of Labes and Amount Descriptions lor the eract worting of the answer choices for text entrios. Be sure to complete the statement heading. A colon () will automaticaly appear if it is tepuined. Enter af amounts as postive numbers. 4. By how much would total annual income increase above its present level if Proposal 3 is accepted? Required: 1. Prepare an income statement for the past year in the variable costing format. Data for each style should be reported through contribution margin. The fixed costs should be deducted from the total contribution margin, as reported in the Total" column, to determine income from operations. 2. Based on the income statement prepared in ( t) and the other data presented, determine the amount by which total annual income from operations would be reduced below its present level it Proposal 2 is accepted. If a loss is incurred, enter that amount as a nogative number using a minus sign. 3. Prepare an income statement in the variable costing format, indicating the projected annual income from operations if Proposal 3 is accepted. Data for each style should be reported through contribution margin. The foced costs should be deducted from the total contribution margin as reported in the Total" column. For purposes of this problem, the expenditure of $34,560 for the rental of additional warehouse space can be added to the fixed operating expenses. * 4. By how much would total annual income increase above its present level if Proposal 3 is accepted? - Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complote the statement heading. A colon (:) will automatically appear if it is required. Enter all amounts as positive numbers. Valdespin Company manufactures three sizes of carnping tents-small (S), medium (M), and large (L). The income statement has consistently indicated a ret loss for the M size, and management is considering three proposals: (1) continue Size M, (2) discontinue Size M and reduce total outpu accordingly, or (3) discontinue Scre M and conduct an advertising campaign to expand the sales of Size S so that the entre plant copacity can continue to be used If Proposal 2 is solected and Size M is discontinued and production curtailed, the annual foxed production costs and fixed operating expenses could be reduced by $46,000 and $32,240, S sales volume. It is also assumed that the increased production of 5ize Sould utlize the plant facilities released by the discontinuance of $ ize M The sales and costs have been relatively stable over the past fow yoars, and they are eapected to remain so for the foreseeable tuture. The income staternent for the past year ended June 30,20Y9, is as follows