Carlos Cavalas, the manager of Echo Products' Brazilian Division, is setting the production schedule for the

last quarter of the year. The Brazilian Division planned to sell $68,640$ units during the year, but by September

$30$ only the following activity had been reported:

The division can rent warehouse space to store up to $30,900$ units. The minimum inventory level the division

should carry is $1,600$ units. The minimum production must be at least $5,340$ units per quarter to retain a

nucleus of key employees. Maximum production capacity is $44,600$ units per quarter.

The sales forecast for the last quarter is only $19,100$ units and fixed manufacturing overhead is a major

element of product cost.

Required:

$1$a$.$ Assume the division is using variable costing. How many units should be scheduled for production during

the last quarter of the year?

$1$b$.$ Assume the division is using variable costing. Will the number of units scheduled for production affect the

division's reported income or loss for the year?

Assume the division is using absorption costing and the divisional manager is given an annual bonus

based on divisional operating income. If Mr$.$ Cavalas wants to maximize his division's operating income for the

year, how many units should be scheduled for production during the last quarter?