Please answer the first question (A-D). The second question is already answered.

I-18.01 Evaluation of cost behavior Grosbeck Cattle Company has gathered the following information about operations for the past three years. Mathew Grosbeck has been expanding herd size and is frustrated that profits have not shown consistent growth. Year 1 Year 2 Year 3 120 140 180 $102,000 $119,000 $153,000 Feed 18,000 21,000 27,000 Labor (1 cowboy per 120 cows) 24,000 48,000 48,000 Cow depreciation 15,000 17,500 22,500 Bull depreciation (1 bull per 30 cows) 1,667 2,083 2,500 Medications/vaccinations 3,000 3,500 4,500 Land lease 10,000 10,000 10,000 Operating income 30,333 16,917 38,500 Cow herd size Revenues from sale of calves (a) Determine which costs are variable, fixed, and "step" fixed. Complete the "per unit" cost table on the preprinted worksheet. (b) How much is the per-cow contribution margin? (c) How do the "step" costs explain the struggle to achieve consistent growth in profits? What strategy should Mathew undertake to maximize profit potential for his operation? (d) Assuming Mathew's land will support a herd of 240 cows, project anticipated profits. Why is the profit more than twice as much as the amount that is earned on a herd size of 120 cows? I-24.01 Multiple decision-making scenarios Pop-In Burgers owns numerous restaurants and food production facilities. The company routinely evaluates proposals to drive operational efficiency. Four such proposals are currently under review. One entails the suggestion to close the unprofitable store in Canyon City. Another is to outsource the acquisition of onions, rather than growing them. Another proposal is to sell packaged beef to a non-competing restaurant chain under a private label. The final proposal is to scrap packaging material that is printed with an old logo. Michelle Euray is controller for Pop-In Burgers and is reviewing staff-prepared reports for each proposal. The reports are summarized as follows: Canyon City Proposal: The Canyon City store should be closed. The company is a consistent money loser. Below is an income report for the Canyon City store for the past year. Half of the fixed expenses relate to facilities rent under a 20-year non-cancelable lease. The lease costs cannot be avoided, and the location is not able to be subleased to another user. Spreadsheet fx A B 1 Sales $1,400,000 2 Variable expenses 1,000,000 3 Contribution margin 4 Fixed expenses 650,000 5 Income (loss) $ (250,000) C D E 400,000 6 Outsource Onions Proposal: The company spent a total of $2,000,000 producing onions during the past year. The onions were grown on a company-owned farm. A vender has offered to supply a similar quantity and grade of onions for $2,200,000. Staff recommends continuing to grow onions because the proposed purchase price is 10% higher than the cost of growing onions. Staff believes it is inappropriate to consider that the onion farm could be leased to another farmer for $350,000, if it is diverted from onion production. Sell Packaged Beef Proposal: The other company has offered to buy packaged beef at $4 per pound. The packing plant is well below full capacity and can accommodate the request without incurring any additional fixed costs. However, staff believes it would be inappropriate to price the beef below its own internal cost of $4.50 per pound, which consists of raw materials ($2.50), direct labor ($0.75), variable factory overhead ($0.25), and fixed factory overhead ($1.00). This transaction would result in no material amount of added selling, general, or administrative costs. Scrap Packaging Material Proposal: The company spent $500,000 on packaging material that is imprinted with an old logo. It is unlikely this material will ever be used. However, staff recommends against scraping because this will result in an immediate charge against net income. It costs only $2,000 per year to store the material. Assume the role of Michelle Euray, and critique each staff prepared analysis