Exhibit 1 Planning notes from the 20X5 launch of the Skinny-Bar 20X5 actual sales $288,600 Total manufacturing costs 230,880 (Total manufacturing cost consists of $115,440 in prime costs and $147, 186 in conversion costs.) The contribution margin ratio for this product was 35%. 156,000 bars were sold at $1.85 per bar. This was a pilot project of the product, so there were no beginning or ending inventories associated with the product. All non-manufacturing costs relating to this product are fixed. The margin of safety percentage for the product at this sales level was -15%. The profit margins on the company's current products can be found below in Exhibit 2. The most profitable product is the Salt-Lick bar at 25.9%, followed by Alamonde at 19.3% and The-Bar at 18.8%. Budgeted margins were 14.3%, 27.5%, and 35.2% for The-Bar, Alamonde, and Salt-Lick, respectively.Project Details Exhibit 2 Actual operating income statement For the year ended December 31, 20X7 The-Bar Per Alamonde Per Salt-Lick Per Total bar Volume bar bar Sales 776,000 528,000 1,606,500 $1,164,000 $1.50 302,500 Cost of goods $ 897,600 $1.70 $ 605,000 $2.00 $2,666,600 945.595 sold 724,672 448,187 2.118,454 Gross margin $ 218,405 $ 172,928 $ 156,813 548, 146 Selling and 541,681 administrative expenses Operating 6,465 income Gross margin % 18.8% 19.3% 25.9% 20.6% Budgeted operating income statement For the year ended December 31, 20X7 The-Bar Per Alamonde Per Salt-Lick Per Total bar bar bar Volumes 774,400 529, 100 301,400 1,604,900 Sales $1, 161,600 $1.50 $ 952,380 $1.80 $ 602,800 $2.00 $2,716,780 Cost of goods 996,034 690,756 390,297 2,077.087 sold Gross margin $ 165,566 $ 261,624 $ 212,503 $ 639,693 Selling and 542,554 administrative expenses $ 97.139 Operating income 14.3% 27.5% 35.2% 23.5% Gross margin %2. New product analysis and pricing - Skinny-Bar (18 marks) a) (7 marks) Determine the break-even in sales dollars for the Skinny-Bar product and prepare a variable costing income statement based on the information provided in Exhibit 1 for actual sales. The income statement must include the cost of direct materials, direct labour, variable manufacturing overhead, fixed manufacturing overhead, and fixed general and administrative costs