Diversified Products, Inc., has recently acquired a small publishing company that offers three books for sale a cookbook, a travel guide, and a handy speller. Each book sells for $14. The publishing company's most recent monthly income statement is given below: Product Line Total Travel Handy Company Cookbook Guide Speller Sales 320,000 98,000 158,000 64,000 Expenses Printing costs 106,000 31,000 63,400 11,600 Advertising 40,000 13.900 21,500 4,600 General sales 19.200 5,880 9,480 3,840 Salaries 37,000 22,000 9,400 5,600 Equipment depreciation 6,900 2,300 2,300 2,300 Sales commissions 32,000 9,800 15,800 6,400 General administration 43,200 4.400 14,400 14,400 Warehouse rent 12,800 3.920 6,320 2,560 Depreciation-office facilities 4.200 1,400 1,400 1,400 Total expenses 301,300 104,600 144,000 52,700 Net operating income (loss) 18,700 (6,600) 14,000 11,300 e following additional information is available about the company: a. Only printing costs and sales commissions are variable; all other costs are fixed. The printing costs (which include materials, labor, and variable overhead) are traceable to the three product lines as shown in the statement above. Sales commissions are 10% of sales for any product b. The same equipment is used to produce all three books, so the equipment depreciation cost has been allocated equally among the three product lines. An analysis of the company's activities indicates that the equipment is used 35% of the time to produce cookbooks, 55% of the time to produce travel guides, and 10% of the time to produce handy spellers. c. e warehouse is used to store finished units of product, so the rental cost has been allocated to the product lines on the basis of sales dollars. The warehouse rental cost is $3 per square foot per year. The warehouse contains 51,200 square feet of space, of which 8,000 square feet is used by the cookbook line, 24,800 square feet by the travel guide line, and 18,400 square feet by the handy speller line d. The general sales cost above includes the salary of the sales manager and other sales costs not traceable to any specific product line. This cost has been allocated to the product lines on the basis of sales dollars