-3-53 (similar to) Question Help Freddie Corporation produces a molded plastic casing, M&M101, for many cell phones currently on the market. Summary data from its 2017 income statement follows. Karen Madden, Freddie's president, is very concerned about Freddie Corporation's poor profitability. (Click the icon to view the summary data.) (Click the icon to view the additional information.) Read the requirements. * More Info - X Requirement 1. Calculate Freddie Corporation's breakeven revenues for 2017 Begin by determining the formula to calculate Freddie Corporation's 2017 contribution margin percentage. = Contribution margin % She asks Daryl Hyde, production manager, and Seth Whitley, controller, to see if there are ways to reduce costs. After 2 weeks, Daryl returns with a proposal to reduce variable costs to 61% of ts Freddie currently incurs for safe disposal of wasted plastic. Seth and Daryl have the following conversation: Seth is concerned that this would expose the company to potential environmental liabilities. He tells Daryl, "We would need to estimate some of these potential environmental costs and include them in our analysis. i Data Table - X Requirements - X "You can't do that," Daryl replies. "We are not violating any laws. There is some possibility that we may have to incur environmental costs in the future, but if we bring it up now, this proposal will not go through because our senior management always assumes these costs to be larger than they turn out to be. The market is very tough, and we are in danger of shutting down the company and costing all of us our jobs. The only reason our competitors are making money is because they are doing exactly what I am proposing. Revenues Variable costs 1. 2. 5,000,000 3,500,000 1,560,000 Calculate Freddie Corporation's breakeven revenues for 2017 Calculate Freddie Corporation's breakeven revenues if variable costs are 61% of revenues. Calculate Freddie Corporation's operating income for 2017 if variable costs had been 61% of revenues. Given Daryl Hyde's comments, what should Seth Whitley do? Fixed costs (60,000) Operating income Print Done 4. Print Done Print Done Done Choose from any drop-down list and then click Check Answer. parts remaining Clear All Check