Could you help on the following question: Purefoods produces two brands of ice cream Magnolia and Nestle. The ice cream are produced from only two ingredients: milk and fruits. Magnolia is 50% milk by weight and 50% fruits, whereas Nestle is 25% milk by weight and 75% fruits, there is negligible loss while making the ice cream. Packaging of either brand weigh 1 pound. Purefoods master budget projects sales of 500,000 packages of each brand in 2017, at $3 per package. Forecasted 2017 ingredients costs are $2 per pound of milk and $1 per pound of fruits. A total 5,000 manufacturing labor-hours 40% for Magnolia and 80% for Nestle are budgeted, at $20 per hour. Manufacturing overhead costs are expected to be $150,000, allocated between the two products on the basis of packages produced. There is no beginning or ending inventory. REQUIRED: 1) Calculate budgeted gross margins for each products and for Purefoods in 2017. 2) By working with its current suppliers, Purefoods estimates it could reduce he cost of ingredients by 3%. Calculate Purefoods revised budgeted gross margin in 2017. 3) An analysis of all activities by a cross-functional team responsible for continuous improvement shows that if the company produces better-quality ingredients from a different supplier costing 5% more than the original ingredients, there will be fewer quality-related production line stoppages, which will reduce manufacturing overhead costs and direct manufacturing labor-hours by 2%. Calculate Purefoods revised 2017 budgeted gross margin under this scenario. 4) Based on budgeted gross margin alone, which of three scenarios here do you think Purefoods management would prefer? What other factors would you consider before choosing between (2) and (3) above. Explain your answer.