Q No.3: (4+4+12) Molten Inc. is a very popular company in selling its primarily ice cream products. The following information is taken from the company records in order to perform some further analysis: Average selling price of ice cream per gallon.. $14.80 Number of gallons sold per month. 3,000 Variable costs per gallon: Ice cream $4.60 Supplies (cups, cones, toppings, etc.) 2.20 Total variable expenses per gallon. $6.80 Fixed costs per month: Rent on building $ 2,200.00 Utilities and upkeep 760.00 Wages, including payroll taxes 4,840.00 Manager's salary, including payroll taxes but excluding any bonus. 2,500.00 Other fixed expenses 1,700.00 Total fixed costs per month $12,000.00 Required: 1. Compute the number of gallons of ice cream that must be sold per month in order to earn a monthly operating income of $10,000 (round to the nearest gallon). 2. Molten company is currently asking a bonus amount of 20 cents per gallon for all store managers for each gallon sold beyond the break-even point. 3. In order to increase the operating income, the company is considering the following two alternatives: a. Reduce the selling price by an average of $2.00 per gallon. This action is expected to increase the number of gallons sold by 20 percent. (Under this plan, the manager would be paid a salary of $2,500 per month without a bonus.) b. Spend $3,000 per month on advertising without any change in selling price. This action is expected to increase the number of gallons sold by 10 percent. (Under this plan, the manager would be paid a salary of $2,500 per month without a bonus.) i. Which of these two alternatives would result in the higher monthly operating income? ii. How many gallons must be sold per month under each alternative for a typical outlet to break even? Provide schedules in support of your answers. iii. Provide your recommendations with respect to these alternative marketing strategies