Broncos Corp. manufactures wooden frames with bronco medallion for framing the college degrees awarded by Western Michigan University. Each Bronco frame sells for $150 and requires: 5 linear feet of special Oak wood that costs $4.00 per foot Other direct material package (each package includes one Bronco Medallion, a glass face, and a cardboard cutout) that costs $25 each package (bought from an outside supplier) 30 minutes of labor hours to build (Labor cost averages $15.00 per hour) Bronco Corp. has the following inventory policies: Ending finished goods inventory should be 25% of next months sales. Ending inventory of Oak wood should be 30% of next months production need. Ending inventory of other direct material package should be 20% of next months production need. (the supply chain for the other direct material packages is quite efficient and therefore, company maintains a smaller inventory of these packages as compared to Oak wood inventory) As per the Marketing and Sales department of the Bronco Corp., sales are high in the month of graduation and the month following the graduation during Fall and Spring each year. Therefore, months of December, January, April, and May are considered high demand months. In a November budget meeting of the current year, the Sales Manager provided following estimates of unit sales for the upcoming months (December current year May next year): December 2,000 frames January 1,500 frames February 800 frames March 760 frames April 2,100 frames May 1,800 frames Variable manufacturing overhead is incurred at a rate of $12.50 per frame produced. Annual fixed manufacturing overhead is estimated to be $300,000 ($25,000 per month) for expected production of 20,000 frames for the year. Fixed selling and administrative expenses are estimated at $31,000 per month and variable selling and administrative expenses are estimated at $15.00 per unit sold. Of its sales each month, 80% is collected in the same month and remaining 20% in the month following the sales. Of the purchase of Oak wood, 60% is paid for during the month of purchase and remaining 40% is paid in the following month. Budgeted Oak wood purchase for December is $34,200. Other direct material package purchases are all paid for in the month of purchase itself. Also, all other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $5,000 in depreciation. During January, Bronco Corp. plans to pay $110,000 for a piece of equipment to replace an old equipment. Bronco had $61,000 cash on hand on January 1. The company has a policy to maintain a monthly minimum cash balance of $50,000. The company may borrow any amount using the credit line provided by their bank to pay for deficits and maintain the minimum required balance of cash. Borrowings or any part of the borrowings may be paid off in the month there is excess cash available (Ignore interest on borrowings 4. After completing requirements 1-3 above revise the budget spreadsheet in a new worksheet to include following changes (you can copy and paste the current spreadsheet in a new worksheet to incorporate following changes): Bronco Corp. is contemplating to increase the selling price of the frames by 10% during the high sales months (graduation months) of December- January and April-May. The management of Bronco believes that it would affect unit sales marginally only, thereby, reducing unit sales by 5% in those months. How would these two changes affect the income of Quarter 1? Based on the analysis, should Bronco Corp. increase the price of frames temporarily during those high demand months? Include a short explanation in Excel file itself. (You need to revise your Excel spreadsheet to determine the effect on income statement. If you used your formulas correctly for requirements 1-3, you will not need to make whole lot of changes to your spreadsheet)