9Perfection Shoes B Sophie Smart and George Sharp finally determined the hours of labor time needed to produce one pair of shoes. Using the incremental unit-time learning model, they noticed that the time to produce a pair of shoes seems to flatten out for their people around the 257th pair of shoes (with a learning curve of 74%). Therefore, Sophie and George decided to base the labor time per pair on the time needed to make the 257th pair using the Incremental Unit-Time Learning Model. Since the laborers have been diligent, Sophie and George raised their pay to $22.50/hour. Now they are trying to determine the best styles to promote on the market. Some styles are more desired and therefore the customers are willing to pay more. To date, there are four styles. The shoe lines are listed below with their current market prices and sales volumes: Style of Shoe The Gazelle The Swan The Tiger The Stallion Market Price per pair $100 $195 $120 $250 Market Volume 5000 4000 8000 3000 The product line data that Sophie and George have collected are listed below: Style of Shoe The Gazelle The Swan The Tiger The Stallion Leather Cost $15.50 $20.60 $25.10 $29.50 Sales Commission based on Sales 2% 2% 20% 2% Price Labor Cost per pair is based on the hourly rate of $22.50 and the hours needed per pair determined in Perfection A. Shared Costs Depreciation on the Property, Plant & Equipment $50,000 Salaries for Administrative Personnel $150,000 Salaries for Plant Personnel $86,200 Maintenance for the Plant $45,000 Janitorial Costs $30,000 Utilities and Property Taxes and Insurance $45,000 $406,200 Sophie and George have asked for your help to determine their breakeven point, and potential profitability as volumes continue to increase. The Sales Mix of the four different styles has held constant for the duration of the company. 1. Determine the Breakeven Point for the sales mix. 2. Format a Contribution Income Statement for a combined sales volume of 10,000 units total, for the combined sales mix. 3. List any assumptions you are making about the Shared Costs. 4. Prepare a Cost-Volume-Profit Graph for the sales mix analyzed. Plot the total revenue, total cost, total variable cost, total fixed cost, profit area, and loss area from zero units to 10,000 units. 5 . Comment on how costs would have changed if the cumulative average learning model had been used in place of the incremental unit-time learning model