Problem 1: CM Income Statement, Breakeven, Required sales and What-if Scenario (25 points: 10+6+3+3+3) Padilla Inc builds raised beds, which it sells for $150 per unit. The company's forcast income statement for the Second Quarter of 20YY for producing and selling 8,000 raised beds is as follows: \begin{tabular}{|r|r|} \hline Padilla Inc. Income Statement for the Second Quarter of 20YY & $ \\ \hline Sales revenue (8,000 garden beds @ \$150 per unit) & $1,200,000 \\ \hline Variable cost of goods sold (8,000 garden beds @ \$40 per unit) & $320,000 \\ \hline Fixed cost of goods sold & $80,000 \\ \hline Gross profit & $800,000 \\ \hline Variable selling expenses (8,000 garden beds @ \$6 per unit) & $48,000 \\ \hline Administrative salaries & $40,000 \\ \hline Shipping and handling expense (8,000 garden beds @ \$2 per unit) & $16,000 \\ \hline Fixed advertising expenses & $10,000 \\ \hline Other administrative fixed costs & $36,000 \\ \hline Net income & $650,000 \\ \hline \end{tabular} Required: A. Prepare a contribution margin format income statement for the Second Quarter of 20YY. \begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|c|}{ Padilla Inc. } \\ \hline \multicolumn{3}{|c|}{ Contribution margin-based income statement for the Second Quarter of 20YY} \\ \hline & $ & $ \\ \hline Sales & & 1,200,000 \\ \hline \multicolumn{3}{|l|}{ Less: Variable costs } \\ \hline Variable COGS & 320,000 & \\ \hline Shipping and handling expense & $16,000 & \\ \hline Variable selling expenses & 48,000 & 384.000 \\ \hline Contribution margin & & 816,000 \\ \hline \multicolumn{3}{|l|}{ Less: Fixed costs } \\ \hline Fixed COGS & $80,000 & \\ \hline Administrative salaries & $40,000 & \\ \hline Fixed advertising expense & $10,000 & \\ \hline Other administrative fixed costs & 36,000 & 166.000 \\ \hline Net Income & & 650,000 \\ \hline \end{tabular} B. Based on the given data and the contrbution marging Income statement prepared in Part A, Calculate the following: C. Calculate the required sales dollars for the Second Quarter of 20YY to earn a net income of $1,000,000 ? \begin{tabular}{|l|l|} \hline Required sales dollar & \\ \hline D.Calculate Padilla's operating leverage. & \\ \hline & \\ \hline F. If the sales revenue in the First Quarter decreases by 25\%, & \\ \hline i) what would be the percentage decrease in Net Income? & \\ \hline ii) what would be the net income following the decrease in sales revenue? & \\ \hline \end{tabular}