QUESTION2: Cost-volume analysis, Breakeven (20 points) Qubec Tire Inc is a commercial business of the province of Quebec. The business is specialized in the distribution of goods for leisure. The company sells also cars parts. For its 2021 budget, Qubec Tire Inc established the operating and financial budgets for the new division which distributes goods for sport activities. The Director, Mr. Robert, shows below the forecast income statements of two products, based on the method of variable costs. Mr. Robert is hesitating regarding the product to sell during the coming winter. Competition is harsh, so Mr. Robert Would like to sell the product which will generate profit the fastest. Mr. Robert heard about the breakeven point method. He is asking you, student in accounting, to help him make a decision, Work to do: 1) Explain to Mr. Robert in maximum 10 lines and in your own words, what the break-even point is, and how that method could help him make a decision to know which product to choose for commercialisation. (5 points). 2) Calculate the break even point in term of units of products of Snowmobile and All Terrain Vehicle (ATV). (5 points). 3) Calculate the break-even point in dollars for products of Snowmobile and All Terrain Vehicle (ATV). (5 points). 4) Suggest to Mr. Robert a choice of product to sell in priority taking into account the results of your calculations above. Explain your choice in 5 lines maximum to Mr. Robert (5 points). QubecTire Inc Forecast income statement 2021 (Snowmobile) Sales (1000 units of Snowmobile a S 2000 each) $ 2 000 000 Costs of goods sold Purchases Handling and delivery (variable) General fees of commissioning - fixed 1 200 000 100 000 150 000 General fees of commissioning - variable 190 000 Total Costs of goods sold 1 640 000 Gross margin 360 000 Operating fees Sales fees - fixed Sales fees - variable General administration fees - fixed 90 000 200 000 75 000 Total operating fees 365 000 Net loss ($ 5 000 Qubec Tire Inc Forecast income statement 2021 (ATV Ice crawler). Sales (750 units of All Terrain Vehicles (ATV)) @ $1800 each $1350 000 Costs of goods sold Purchases Handling and delivery (variable) General fees of commissioning - fixed General fees of commissioning - variable 750 000 70 000 180 000 160 000 Total Costs of goods sold 1 160 000 Gross margin 190 000 Operating fees Sales fees - fixed Sales fees - variable General administration fees - fixed 40 000 50 000 105 000 Total operating fees 195 000 Net loss ($ 5 000)