QUESTION 1 Saruman Division (SD) produces Gollum -1 a memory enhancement kit for Barad - Dur's Uruk- Hai Microwaves. Sales of the kits have been very erratic, with some months showing a profit and some months showing a loss. Currently, production equals sales. The division's contribution margin income statement for the most recent month is given below: Sales (13,500 units at $20 per unit) $270,000 Variable expenses (all production related) 189,000 Contribution margin 81,000 Fixed expenses (all production related) 90,000 Net operating loss $ (9,000) REQUIRED: 1. (A) Compute the division's CM ratio and its break-even point in units of Gollum-1. (B) Given the above income statement showing a loss, should the division be shut down? Would your answer change if by shutting down the division, Saruman company can save $40,000 of fixed cost? Explain your answers clearly.