C3-77 WaterDogs Inc. Nikki Castle started making lifejackets for dogs in her basement part-time 10 years ago after getting a puppy. She wanted to go canoeing but was unable to find a suitable lifejacket for her puppy, so she spent a couple of days fabricating something herself, When Nikki got to the canoe club, she was flooded with inquiries about her puppy's lifejacket, and she started taking orders. Ten years later, her company now has revenues of over $5,000,000 per year, and her lifejackets are sold in 45 different countries through her online store and in spe- cialty pet stores across North America. Before starting her business, WaterDogs, Inc., Nikki had been working in an insurance company as a clerk. She had always made her own clothes and had taken a few fashion design courses but did not have a business background. Beginning the company was chal- lenging, and over the first few years of getting her business going, Nikki also took a few online courses in business management and accounting. There were a couple of times that she thought the business wasn't going to make it-especially in the beginning when she experienced a lot of growth very quickly-but after six years she was confident enough with the organization to incorporate. She hires an accountant to look after the bookkeeping and goes through an audit each year, but doesn't feel as though the financial statements, and in particular the income statement, provide her with the right information for decision making 2019 2020 2021 Revenues.. 4.880,000 4,320,000 5.355.000 Less cost of goods sold: Beginning inventory 2.600.000 3.520,700 5322 917 Add: Cost of goods manufactured 3.230.000 3.650 000 4,175.000 Cost of goods available for sale. 5,830,000 7,170,700 9.497.917 Less: Ending inventory 3.520.700 5.327 917 7 399 878 Cost of goods sold 2 309.300 1.847 743 2094.089 Gross profit 2 570,700 2.472.217 3.256.911 Less Operating expenses Selling and admin. 1 608 000 587.080 1,614.700 Operating income $52 700 895 217 1612 211 Her income statements didn't seem to fit with what she felt the company was really doing. Yes, the company was growing, but not at the rate that the profit was demonstrating Nikki thought. In particular, Nikki felt that 2020 had been a slump year, but the income statement doesn't seem to reflect that. She dug up some additional information on the com- pany and was looking at it when she decided she needed an advisor to help her. She didn't have enough knowledge to be able to figure out what to do. 2018 2019 2020 2021 Units beginning Inventory 1091000 175,000 Units produced 90,080 100 800 1201090 1 45.000 Units sold 61.000 51000 63,000 Direct materials are $12 per unit, direct labour is $6 per unit, and variable manufacture ing overhead is $3 per unit for each of the years. The company ines a FIFO inventory system. Required: Write a business plan that will help Nikki address her questions