Cycling Glory (CG), a division of Outdoor Pursuits Limited (OPL), produces two mountain bicycles: the Silver medel, which OG has produced since 2015 and sells for $710, and the Gold model, a newer model introduced last year that sells for $1,150. Using the table below, complete a revised profitability statement using the activity based information provided by Wendy to allocate production overhead 4 marks Indormation from the most recent profitability statement follows: Silver Gold Total Silver Go Total Revenue S 21.300.000 S 5.622.500 5 26,923.500 Revenue Less cost of goods sold Direct material Direct labour Production overhead: 3.033.600 2.569.600 7.603 200 415 600 184.800 Soldering 4.810.000 440,000 3.250.000 10,279,200 3.194.400 13.473.600 Les cost of goods sold Direct material Direct labour Production overhead Total costs of goods sold Gross margin Selling and administrative expenses Operating income Units produced and sold Operating income per unit sold Shipments Quality control Purchase orders 11.020.00 2.429.100 13.449.900 6,413.000 1,075,800 7.488.800 4.607.800 1,353,300 3.961.100 30,000 4.890 153_595 276.75 Mashine power Machine setups Total costs of good sold Gross margin Selling and administrative expenses Operating income Units produced and sold Operating income per unit would CGs management accountant, Wenty Young, is advocating the use of an activity-based costing system to allocate overheads and has gathered the following information about the company's production overheads for the most recent year. Activity-cost-driver quantities Activity Silver Gold b) Explain the ethical dilemma thart Wendy is facing. Type your response directly into the text box below Soldering 1,185,000 3 marks 16,200 Shipments Quality control Total activity costs Activity-cest driver $ 1,036,200 number of solder points $ 945,000 number of shipments $ 1,334,000 number of pections S 1,045,4401 number of orders $ 63,360 machine-hours $ 825.000 number of set-up $ 5.250.000 56,200 80,1001 385.000 3,800 21,300 109,9801 16.000 14,000 Purchase orders Machine power 176,000 Machine set-ups 16,000 Total production overhead After completing her malysis, Wendy shows the results to Mike Moore, the divisice manager of CG. Mike does not like what he sees and remarks that if you show headquarters this analysis they are going to ask us to discontinue the Gold line, which we have just introduced and which I was the main sponse for. This will ruin my career. I don't see what the problem with the previous costing system was. Let's keep using the old system to allocate costs. I just can't have headquarters asking questions right now c) Advise Wendy of how she should respond in this situation - Type your response directly into the text box below. 3 marks