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The Galadriel Printing Company (TGPC) operates a printing press with a monthly capacity of 3.200 machine-hours. TGPC has two main customers: Wallace Corporation and Kimberly Corporation. Data on each customer for January are: Wallace Corp Kimberly Corp $ 160,000 Total $ 400,000 Revenues $ 240,000 Variable Costs 122.600 112.000 Contribution Margin 110,400 48,000 241.600 158.400 125.000 $33,400 50.000 Fixed costs (allocated) Operating income Machine-hours required 75,000 $ 35,400 2,400 hours $(2.000) 800 hours 3.200 hours Kimberly Corporation indicates that it wants TGPC to do an additional $160,000 worth of printing jobs during February. These jobs are identical to the existing business TGPC did for Kimberly in January in terms of variable costs and machine-hours required. TGPC anticipates that the business from Wallace Corporation in February will be the same as that in January. TGPC can choose to accept as much of the Wallace and Kimberly business for February as its capacity allows. Assume that total machine-hours and fixed costs for February will be the same as in January. 5) Ignore Kimberly's offer. Based on the original data, should the manager keep or drop the Kimberly customer, given that it is making a loss? Assume that dropping Kimberly will eliminate $20,000 of fixed costs. Show your calculations and clearly explain your logic. (10 points) Edit View Insert Format Tools Table 12pt Paragraph BI U A evrou bo D De 6) Should TGPC accept Kimberly Corporation's offer? Assume that in the short run. TGPC cannot increase capacity or outsource. Show your calculations to support your logic. What other factors should TGPC consider before making a decision based solely on the numbers? (15 points) Edit View Insert Format Tools Table 12pt Paragraph I UA & Top $