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 $12. The publishing company's most recent monthly income statement is given below: Product Line Tota Travel Handy Company Cookbook Guide Speller 310,000 94,000 154,000 62,000 Sales Expenses Printing costs 104,000 29,000 63,200 11,800 Advertising 38,000 13,700 20,500 3,800 General sales 18,600 5,640 9,240 3,720 Salaries 35,000 20,000 9,200 5,800 Equipment depreciation 6,300 2,100 2,100 2,100 Sales commissions 31,000 9,400 15,400 6,200 General administration 42,600 14,200 14,200 14,200 Warehouse rent 12,400 3,760 6,160 2,480 Depreciation-office facilities 3,600 1,200 1,200 1,200 Total expenses 291,500 99,000 141,200 51,300 18,500 (5,000) 12,800 10,700 Net operating income (loss) The 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 n 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 25% of the time to produce cookbooks, 45% of the time to produce travel guides, and 30% of the time to produce handy spellers c. The 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 49,600 square feet of space, of which 7,600 square feet is used by the cookbook line, 24,400 square feet by the travel guide line, and 17,600 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 e. The general administration cost and depreciation of office facilities both relate to administration of the company as a whole. These costs have been allocated equally to the three product lines f. All other costs are traceable to the three product lines in the amounts shown on the statement above The management of Diversified Products, Inc., is anxious to improve the publishing companys 5% return on sales