Tracey Douglas 15 the owner and managing director of Heritage Garden Furniture Ltd., a South African company that makes museumquality reproductions of antique outdoor fumiture. Tracey would like advice concerning the advisability of eliminating the model C3. lawn chalr. These lawn chairs have been among the company's best-selling products, but they seem unprofitable. A condensed statement of operating income for the company and for the model C3 lawn chalr for the quarter ended June 30 followst "The currency in South Africa is the rand, denoted here by R. The following additional data have been supplied by the company; a. Direct labour is a variable cost at Heritage Garden Furniture. b. All of the company's products are mansfactured in the same faclity and use the same equipment, Building rent, maintenance, and d. Dropping the model C3 lawn chair would have no effect on sales of other product lines: e. Inventories of work in process or finished goods are insignificant. f. Shipping costs are traced directly to products. 9. General administrative expenses are allocated to products on the basis of sales dollars. There would be no effect on the total general administrative expenses if the model C3 lawn chair were dropped. h. If the model C 3 lawn chair were dropped, the product manager would be laid off. Required: a-1. At current level of sales, compute the effect of net operating income if the Model c3 lawn chair is dropped. 1.b. Would you recommend that the model C3 lawn chair be dropped? 2. What would sales of the model C3 lawn chair have to be, at minimum, in order to justify retaining the product? (Hint Set this up as a break-even problem, but include only the relevant cosis from part (0).) (Round "Contribution morgin ratio" to 2 decimal ploces and finol enswer to the neorest whole number.)