Fueld Motorworks Inc. manufactures and sells two types of motorcycles: Street and Cruiser. Budgeted sales for 2020 are as follows: Street Cruiser # motorbikes sold 1,000 800 Selling price/cycle $15,000 $20,000 Variable expenses/cycle $8,000 $10,000 Fueld Motorworks Inc. has four departments: Material handling, Cutting, Assembly, and Inspection. Employees work an average of 2,000 hours per year. Fixed expense information is as follows: % Time Total $ # Emp'ees Street Cruiser Mat'l handling 40% 50% $1,000,000 16 Cutting 30% 70% $3,000,000 30 Assembly 40% 60% $5,000,000 48 Inspection 50% 50% $500,000 $9,500,000 100 The company has used activity-based costing in the past. The budgeted income from operations for 2020 using ABC is as follows: Street Cruiser Total Sales $15,000,000 $16,000,000 $31,000,000 Variable expense 8,000,000) (8,000,000) (16,000,000) Contribution margin 7,000,000 8,000,000 15,000,000 Fixed expenses Mat'l handling (400,000) (600,000) (1,000,000) Cutting (900,000) (2, 100,000) (3,000,000) Assembly (2,000,000) (3,000,000) (5,000,000) Inspection (250,000) (250,000) (500,000) (3,550,000) 5,950,000) (9,500,000) Income from operations $3,450,000 $2,050,000 $5,500,000 Net profit/unit $3,450.00 $2,562.50 The company wants to allocate fixed expenses based on TDABC. An analysis of activities and time per activity is as follows: Unit time # activities in hours Street Cruiser Mat'l handling 0.8 10 20 Cutting 5.0 u 6 Assembly 1.3 20 50 Inspection 1.0 5 8 a. Prepare the income from operations for Fueld Motorworks Inc. using TDABC. b. Interpret the results and make recommendations