Case Study (Group 3) Speedy fiouts, inc produces inflatable rafts used for river rafting. 5 ales have grown slowhy over thin rearh, and cost increases are causing Speedy Floats financial difficulties. Financial data for the most incert finandaf, yeaf are shown: Members of the management group at Speedy Floats identified multiple possible courser of action to return the company to profitability (each scenario is independent of the others). Your group has been hired as a management consultant and is tasked with the analysis of one management proposal: Management Proposal Increase advertising costs by $200,000, which will increase sales volume by 15 percent Although fixed selling and administrative costs will increase by $200,000, the group believes the increase in rafts sold will more than offset the increase in advertising costs. Required: i. Prepare a variable costing-based Income Statement and an absorption costing-based Income Statement for the most recent financial year of Speedy Floats based on the provided financial ii. Prepare a revised set of income Statements for the most recent financial year if Units produced = 1,500 information. units. Sales remain unchanged. What do you observe? iii. Calculate the projected operating profit (loss) if the management proposal is implemented and determine whether the option is acceptable. iv. Discuss and document the advantages and disadvantages of the option assigned, both financial and v. Prepare a spreadsheet for the analysis and a summary of your findings and conclusions in Powerpoint. non-financial. Be prepared to discuss your findings with Speedy Float's management (in class). Remember to submit your files on Blackboard and include your names and group number with your submission. Case Study (Group 3) Speedy fiouts, inc produces inflatable rafts used for river rafting. 5 ales have grown slowhy over thin rearh, and cost increases are causing Speedy Floats financial difficulties. Financial data for the most incert finandaf, yeaf are shown: Members of the management group at Speedy Floats identified multiple possible courser of action to return the company to profitability (each scenario is independent of the others). Your group has been hired as a management consultant and is tasked with the analysis of one management proposal: Management Proposal Increase advertising costs by $200,000, which will increase sales volume by 15 percent Although fixed selling and administrative costs will increase by $200,000, the group believes the increase in rafts sold will more than offset the increase in advertising costs. Required: i. Prepare a variable costing-based Income Statement and an absorption costing-based Income Statement for the most recent financial year of Speedy Floats based on the provided financial ii. Prepare a revised set of income Statements for the most recent financial year if Units produced = 1,500 information. units. Sales remain unchanged. What do you observe? iii. Calculate the projected operating profit (loss) if the management proposal is implemented and determine whether the option is acceptable. iv. Discuss and document the advantages and disadvantages of the option assigned, both financial and v. Prepare a spreadsheet for the analysis and a summary of your findings and conclusions in Powerpoint. non-financial. Be prepared to discuss your findings with Speedy Float's management (in class). Remember to submit your files on Blackboard and include your names and group number with your submission