#4 in the instructions, please.

The controller has been asked by the president of the company for advice on whether to continue production during June or to suspend the manufacture of solvent until July 1. The following data have been assembled: Celecia Industries Inc. Income Statement-Solvent For the Month Ended May 31 Sales (25.000 units X$JS per unit) $375.000 (256,250) Cost of goods sold E Gross profit $118.250 LIL Selling and administrative expenses (27,500) SHE SHEIGH Operating loss. $41.250 A4 The production costs and selling and administrative expenses, based on production of 25,000 units in May, are as follows: Direct materials Direct labor Variable manufacturing cost $2.50 per unit 3.00 per unit 0.75 per unit 1.50 per unit $100,000 for May 40,000 for May Variable selling and administrative expenses Fixed manufacturing cost Fixed selling and administrative expenses Sales for June are expected to drop 40% below those of May to 15,000 units (25,000 x 60%). No significant changes are anticipated in the fixed costs or variable costs per unit. No extra costs will be incurred in discontinuing operations in the portion of the plant associated with solvent. The inventory of solvent at the beginning and end of June is not expected to be significant (material). Instructions 1. Prepare an estimated income statement in absorption costing form for June for solvent, assuming that production continues during the month. 2. Prepare an estimated income statement in variable costing form for June for solvent, assuming that production continues during the month. 3. What would be the estimated operating loss if the solvent production were temporarily suspended for June? 4. What advice should you give to management? MA