Skyler Company is a medium sized, decentralized, national, multi-product manufacturing and marketing corporation, which employs over 6,000 people. It was organized on November 1 of the previous year. After seven months of start-up losses, management had expected to earn profit during June, the most recent month. Management was disappointed, however, when the income statement for June showed that losses were still being realized by the company. June's income statement follows: SKYLER COMPANY Income Statement For the month ended June 30 Sales 600,000 Less operating expenses: Selling and administrative salaries 35,000 Rent on Facilities 40,000 Purchase of raw materials 190,000 Insurance 8,000 Depreciation, sales equipment 10,000 Utilities costs 50,000 Indirect labour 108,000 Direct labour 90,000 Depreciation, factory equipment 12,000 Maintenance, factory 7,000 Advertising 80,000 630,000 Net loss (30.000) After seeing the 30,000 net loss for June, Skyler's president stated, "I was sure we'd be profitable within six months, but after eight months we're still showing a loss. Maybe it's time for us to throw in the towel and accept one of those offers we've had for the company. To make matters worse, I just heard that Linda won't be back from her surgery for at least six more weeks." Linda is the company controller; in her absence, the statement above was prepared by a new assistant who has had little experience in manufacturing operations. Additional information about the company follows: 1. Only 80% of the rent on facilities applies to factory operations; the reminder applies to selling and administrative activities. 2. Inventory balances at the beginning and end of the month were as follows: June 1 June 30 Raw materials Work in progress Finished goods 17,000 70,000 20,000 42,000 85,000 60,000 3. A 75% of the insurance and 90% of the utilities costs apply to factory operations; the remaining amount apply to selling and administrative activities. The president has asked you to check over the above income statement and make recommendations as to whether the company should continue operations. Required a. As one step in gathering data for recommendation to the president, prepare a schedule of cost of goods manufactured for June. b. As a second step, prepare a new income statement for the month. c. Based on your statements prepared in (a) and (b) above, would you recommend that the company continue operations? State all possible consequences for the business and employees under any option. recommendations as to whether the company should continue operations. Required a. As one step in gathering data for recommendation to the president, prepare a schedule of cost of goods manufactured for June. b. As a second step, prepare a new income statement for the month. c. Based on your statements prepared in (a) and (b) above, would you recommend that the company continue operations? State all possible consequences for the business and employees under any option. d. While revenue in the company has remained constant over the last months, net income has decreased by over 50% in that period, and recently the company has dealt with losses. As a result of this decline in profitability, the share price has decreased by 60%. Identify five management accounting techniques/tools that you will instruct your staff to investigate. For each technique/tool identified, explain what specific benefits you hope to realize. Note that to state that profitability will improve is too general; rather, you should explain how the technique leads to this improvement. Be thoughtful and practical in your discussions and be mindful of the type of company