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Cost-Volume-Profit Analysis (12 points) Gamma manufacturing company, had revenue of $1,200,000 and a gross margin of 25% on revenue during 2018, its first year of

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Cost-Volume-Profit Analysis (12 points) Gamma manufacturing company, had revenue of $1,200,000 and a gross margin of 25% on revenue during 2018, its first year of operations. Its fixed non-manufacturing costs were $150,000 and there were no variable non-manufacturing costs. The company's contribution margin was 40% of revenue. It had no work in process and finished goods inventories at the end of the year. Required: 1) What is the first year operating Income? 2) What were Gamma's fixed manufacturing costs and variable manufacturing costs for 2018? You should provide separate answers, not a combined 3) What is the break even revenue and degree of operating leverage for Gamma based on its first year revenue and cost data? 4) Gamma anticipates that over a relevant range of $700,000 to $1,500,000 in revenue, its total fixed costs will not change and the total variable costs as a % of total revenue will be constant. How much second year revenue should it budget to generate a pre-tax operating income that is 40% more than what it made during its first year? Show your calculations (Show your work in the space below or on your scratch paper to get partial credit.)

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