Whole Earth Foods produces and sells breakfast cereal for $3.50 per box; related information appears below when 800,000 units were produced and sold. Item Total Cost Strawberries and blueberries $578,950 Cost for cereal bags and boxes 125,000 Utilities for factory 17,000 Salaries for office staff 275,000 Wages for factory cleaning staff 48,000 Advertising (based on web page views) 152,800 Rent of factory and equipment 550,000 Wheat and other grains 406,000 Wages for production crew 260,000 Required: a. Identify all costs above as either a product cost (specifically DM, DL or OH) or a period cost (PC). b. The company uses the target cost approach to pricing and has determined that the market price for their product should be $3.75 per box. If the company wants to achieve an approximate profit of 20 percent, did it meet its target cost? What two specific actions would you recommend? c. Assume that the company had only sold 600,000 units what dollar amount would it report for cost of goods sold and ending inventory in its financial statements? As needed, round your final answer to the nearest dollar. d. Identify all costs as either a variable cost (VC) or a fixed cost (FC) then calculate the variable cost per unit (rounded to the nearest penny) assuming 800,000 units were produced and sold as well as the total fixed costs. Prepare a CVP income statement to answer each scenario below. The scenarios are independent of each other and unless specified otherwise, use the volume, rounded VC per unit and FC data from part d as well as the original price (i.e. not the market price noted above). e. The company is considering whether it should use organic berries in its product line. If so, its most recent costs for berries would increase by $0.06 per unit. If the change is made, the company anticipates that sales volume would increase by 4 percent. What is the projected net income under this scenario? f. The company is considering whether it should make upgrades to the factory and equipment that would improve the product's freshness. If so, the rent on factory and equipment would increase by 15 percent. Management also projects that its sales volume would increase by 15 percent, if the price were lowered by $0.15 per unit for all units. What is the projected net income under this scenario? g. Which course of action would you recommend (i.e. do nothing, use organic berries or upgrade equipment and lower the price)? Briefly explain