uswap Wood Pellets Inc. sells three types of wood pellets: Pine, Cedar and Blr For the second quarter of 2018, management estimates the following results Pine Cedar Birch Sales Sales price Direct Materials 25,00030,000 18,000 50 kg bags $ 12.00 10.00 $ 15.00 per bag $ 3.00 $ 2.10 $ 3.50 per bag onversion costs (variable) 150.00 $ 150.00 $ 150.00 per MH Variable S&A Fixed S&A 8% 7% 5% of sales $25,000 25,000 25,000 per quarter At the end of the first quarter of 2018, the company expects to have inven the second quarter for the summer shut down period. tory of 2,000 50 kg bags of Pine and 1,600 bags of Birch. Inventory is expected to be zero by the end of Each of the three products has sufficient direct materials stockpiled for the second quarter production requirements. However, one of the machines used to process the wood pellets recently broke down and the replacement parts are not expected to arrive until the middle of summer 2018. As such, the plant capacity has been reduced to 1,200 machine hours for the second quarter of 2018 Due to the different requirements for each type of wood used in the pellet making process, the number of 50 kg bags produced per hour varies significantly. Cedar is th softest and yields 60 bags per machine hour while Birch is the hardest and yields only 40 bags per machine hour. Pine is in the middle yielding 50 bags per machine hour. Required: a) Calculate the number of 50 kg bags of each product that Chase Wood Products Ltd. (10 should produce in the second quarter of 2018 to maximize company profits. marks) b) What is the forecast net income before taxes for the second quarter of 2018? Show all details of your calculations