Bert's Toys produces toys and other merchandise for highly successful children's animated movies and television shows. Bert's recently paid Pixel Studios $90,000 for the rights to produce 'pop' toys for their soon to be released movie. Bert's immediately began production of the toys Bert's anticipates being able to sell each pop toy for $42. So far they have manufactured 25,000 of the pop toys at a manufacturing cost of $625,000. To date they have paid $410,000 of the manufacturing costs and estimate the future marketing costs to sell the pop toys will be $330,000. Bert's sales department anticipates very strong demand and that Bert's will sell out of all pop toys manufactured Pixel Studios is demanding another $50,000 from Bert's and are about to file a lawsuit to stop production of the toys. Bert's lawyers suggest that Pixel are likely to win the lawsuit in which case Bert's will be unable to recover any amounts already paid to Pixel. Required 1. If the anticipated sell out of pop toys occurs, assuming Bert's settles the disagreement with Pixel, determine the overall profitability of the pop toy line. (3 marks) 2. Should Bert's pay the additional $50,000 to Pixel or should they drop the pop toy line? Explain and show all calculations to support your answer. (10 marks) (Total 13 marks)