Starfish T-shirts makes trendy t-shirts and sells them for $10 per t-shirt. Trends change fast in this industry. Recently, the sales manager decided that the company should make a final batch of "Old-Town-Road" t-shirts. Starfish T-shirts uses Absorption Costing. Information for the last period (all actuals unless otherwise noted) and next period (all estimates) are as follows: last month next month Variable Manufacturing cost (per 1,000 t-shirts) $ 1,500 same as last month Fixed Manufacturing cost $56,000 $33,000 Variable Selling cost (per 1,000 t-shirts) $ 1,000 same as last month Fixed Selling cost $65,000 same as last month Sales (t-shirts): 100,000 30,000 Ending Inventory (t-shirts): 20,000 0 Budgeted production volume (t-shirts) 100,000 10,000 fixed manufacturing production volume variance $8,000 U $0 fixed manufacturing flexible budget variance $6,000 U $0 Required: A. How much overhead was applied to WIP last month? B. Calculate the pre-determined fixed overhead rate for the last month C. How many t-shirts were actually produced last month? D. Prepare a budgeted income statement for next month. E. The production manager disagrees with the sales manager, and insists on producing 22,000 old-town-road t-shirts next month. Fixed costs will not change with the proposed increase in production. Why would the production manager insist on making extra tshirts, even though the sales manager exists that what sold in 2019 will not sell in the current year (1 mark)? F. Would the production manager still insist on making extra t-shirts if Starfish t-shirts used variable costing? Briefly explain your answer (1 mark).