You have been asked to assist the management of Ironwood Corporation in arriving at certain decisions. Ironwood has its home office In Michigan and leases factory buildings in Wisconsin, Minnesota, and North Dakota, all of which produce the same product. Ironwood's management provided you with a projection of operations for next year, as follows. Sales revenue, Total 5890,000 Wisconsin Minnesota $444,000 $281,000 North Dakota $165,000 Fixed costs Factory 215,000 110,000 58,000 47.000 Administration 70,000 39,000 25.000 6,000 Variable costs 289.000 133,000 1,000 75,000 Allocated home office costs 97,000 44,000 34,000 19,000 Total 5671,000 $326,000 $190.000 $147,000 Operating profit $219,000 $110,000 3,000 $18,000 The sales price per unit is $5 Due to the marginal results of operations of the factory in North Dakota, Ironwood has decided to cease its operations and sell that factory's machinery and equipment by the end of this year. ironwood expects that the proceeds from the sale of these assets would equal all termination costs. Ironwood, however, would like to continue serving most of its customers in that area if it is economically feasible and is considering one of the following three alternatives: Expand the operations of the Minnesota factory by using space presently idle. This move would result in the following changes in that factory's operations Sales revenue Fixed costs Factory Administration 21 11 Under this proposal, variable costs would be $2 per unit sold Enter into a long-term contract with a competitor that will serve that area's customers. This competitor would pay fromwood a royalty of $13 per unit based on an estimate of 29.000 units being sold Close the North Dakota factory and not expand the operations of the Minnesota factory Total home office costs of $97,000 will remain the same under each situation Required To assist the management of ironwood Corporation, complete the following schedule computing Ironwood's estimated operating profe brom each of the following options a. Expension of the Minnesota fectory b. Negotiation of the long-term contract on a royalty bas Shutdown of the North Dakota operations with no expension at other locations Complete this question by antering your answers in the tabe below A