The company that you work for as a managerial accountant considers changing the production process from manual to automatic. The result of the change would be that variable manufacturing costs would be reduced from currently 40% of Sales to 15% of Sales, but fixed manufacturing costs would double to $1.8m. You had already prepared the following income statement for the company based on the current manual production process: YearEndingMarch31,2017 Sales Cost of goods sold (variable and fixed manufacturing costs) Gross profit Selling and administrative expenses Variable costs ( 10% of sales) Fixed costs Income before taxes Income tax expense (20\%) Income after taxes Management also wants to examine the possibility of outsourcing their production. A suitable supplier was identified and the supplier offers to produce the good in the right quality and quantity at cost of 45% of sales. If the company outsources its production, the company would no longer incur variable manufacturing costs and would reduce its fixed manufacturing costs to one-third of its current fixed manufacturing costs (under manual operation). All other fixed costs, as well as variable cost percentages, would remain the same as in the above pro forma income statement. Assume that the company produces its products just-in-time. Hence all manufacturing costs become Cost of Goods Sold. Instructions: a) Based on the provided information calculate the break-even point in sales dollars for the company for the year ending March 31, 2017. (3 Marks) b) Calculate the break-even point in sales dollars for the year ending March 31 , 2017, if the company changes to an automatic production. (3 Marks) c) Calculate the sales dollars required for the outsourcing option to have the same operating income as projected in the pro forma income statement (the current manual production process) for the year ending March 31, 2016. (3 Marks) Starting from which level of sales dollars is the manual production option better than the outsourcing option? Show your calculations and justify your