Alberta Ltd. Produces a lens used for webcams. Summary data from its year 2019 income statement are as follows: Revenues $8,000,000 Variable costs 4,620,000 Fixed costs 3,600,000 Operating income $(220,000) The president of Alberta, Donald Sale, is very concerned about the companys operations, and needs to present the 2020 forecast to the board by the end of the month. He has discussed the situation with the Operations Manager, Ronald Jones, and the controller, Laura Dallas, CPA. Donald Sale usually receives a bonus of 7% of operating income each year, while Mr. Ronald Jones will receive 5% of operating income as a bonus each year. After two weeks, Ronald returns with a proposal. After researching various component parts, he advises that he can reduce variable costs to 48% of revenues by changing both the direct materials and the production process. The downside of this proposal is that the new direct material (although cheaper) results in more waste and is more toxic to the environment. Currently, waste produced in the production process does not require any special treatment and is disposed of normally. Ronald points out that there are no current specific laws governing the disposal of this waste created by the use of the new material, and therefore production costs can be cut by using this material. Laura is concerned that this would expose the company to potential environmental liabilities. She believes that these potential future costs need to be estimated and included in the analysis. Ronald disagrees and reiterates that there are no laws being violated and replies, There is some possibility that we may have to incur costs in the future, but if we bring it up now, this proposal will not go through because our senior management always assumes these cost to be larger than they are. The market is very tough and we are in danger of shutting down the company. We dont want all our colleagues to lose their jobs. The only reason our competitors are making money is because they are doing exactly what I am proposing. 1 The president has asked the controller to prepare a report on handling this situation and needs to take it to the board next week. He has never taken a loss to the board in the past and told the controller to fix the estimates for the 2020 forecast. REQUIRED: You are Laura Dallas, CPA, Controller. Prepare a report for the president. Include a. the breakeven revenues for the year 2019 b. breakeven revenues if variable costs are 48% of revenues c. calculate the operating income for 2019 if variable costs had been 48% of sales and d. Calculate estimated 2020 income if sales increased by 15%. e. Consider any accounting issues f. Consider any corporate social responsibility issues g. Discuss any ethical concerns the accountant may be facing and how to handle the situation. h. Provide recommendations for how the President should proceed