Part A: Cost Classification (Chapter 2,6 ) (5 marks) Required: Classify each of the below operating expenses as variable or fixed. \begin{tabular}{|l|c|} \hline \multicolumn{1}{|c|}{ Monthly Salaries } & To be calculated by the group \\ \hline Commission as a percentage of sales & 12% \\ \hline \multicolumn{2}{|c|}{ Monthly } \\ \hline \multicolumn{2}{|c|}{ Percentage of sales } \\ \hline \multicolumn{2}{|c|}{} \\ \hline \multicolumn{2}{|c|}{ Rent components: } \\ \hline Utilities costs incurred are indepentent of sales volume fthey will not change if sales volume \\ \hline Parts and Service expense varies with sales activity and can be traced to each product line. \\ \hline The company uses straight-line depreciation on all depreciable assets. \\ \hline The property taxes are set by the City and do not change with changes in sales volume. \\ \hline Advertising budgets are committed to at the beginning of each year. \\ \hline \end{tabular} Note 1: Sales by Segment (taken from Q2 segmented income statement) Case Intro Q1 Q2 Q3 Q4 Q5 Q6 Group Member Evaluation + Prepare a contribution margin income statement (below), using the traditional income statement provided and the cost information provided in Part A Check figures have been provided to ensure you are on the right track. See the word document provided to your groupl Mountain Sports Ltd. Contribution Margin Income Statement For the Year Ended Dec 31, 2019 Note from Instructor: All formulas must b completed within the answer boxes. Do r use a calculator and input the final answe It will result in rounding errors and you w. be marked as incorrect. This is applicable for all calculations in the case study. Part C: CVP Analysis (Chapter 6) (9 marks) Calculate the following and explain each calculation (in your own words). Be sure to explain what the number you've calculated means, ensuring you write it in a way so that a non-accountant can understand. For example, if you calculate a breakeven point of $1,000, what does $1,000 mean? Marks will not be 1) Breakeven Point in Sales Dollars 3) Degree of Operating Leverage (DOL) (operating income to be used in calculation) 4) The junior accountant left a note for you: In the managerial accounting course that I took, I learned that degree of operating leverage is a measure of risk. I don't really understand that. Can you help me? What does leverage mean? Is it better to have high leverage or low leverage? The owners have asked me if they should focus more on variable costs or fixed costs, what should I say? They expect that sales will increase next year