You have been invited to participate in an accounting competition. Your team will be making a presentation to Michelle and Vishayla who are sister's-in-law who have recently opened a bakery specializing in cakes. They realized their love of baking after they married brothers, Josh and Cody. For a few years they created cakes for family and friends. The demand for their cakes had grown to the point where they could no longer use their kitchens as their "bakery." They rented a store front on Warwick Blvd in Newport News that used to be a diner. It had a kitchen that was converted into a bakery with large ovens, mixing bins, and prep/decorating area. The owner made all the conversions for the bakery. Michelle and Vishayla currently sell to individuals, area local stores, and event centers for parties/weddings. To get their growing business off the ground they hired a supervisor and two wage employees who work as orders are received. The rest of their payroll includes a financial accountant and one office staff who prepares invoices and does other office duties. They have also hired a sales person who is paid based on the number of cakes sold. Of the store front they have rented, 80% is used as the bakery and 20% is used as office space. 1. They have asked you to prepare managerial accounting data of their current operation. They know the amount of ingredients in each cake but do not know how much labor to add to the cost and the amount of overhead to allocate to each cake. The accountant they have hired is good at preparing financial statements they need to give to the bank and prepare taxes and payroll but is not a managerial accountant and is not able to help. They need to know the cost per cake in order to be able to calculate their cost of goods sold. A list of the calculations they would like for you to prepare for them, as well as, information concerning next period's operations is below. Task Michelle and Vishayla need to know the cost per cake so they can be sure they are charging enough for each cake. They also need this to calculate the cost of goods sold. They feel that direct labor hour is the best cost driver for allocating manufacturing overhead. They pay their wage employees $10.00 per hour. Due to the type of production that they have, they believe job order costing is the best costing system. Here is the estimated data for 2023 : This total includes the supervisor's salary which is a flxed cost. lint: Calculate direct labor based on the number of cakes. The difference between the amount calculated and the annual amount oove is the supervisor's salary) They have asked you to determine the following: 1) Calculate the cost per cake 2) Create a budgeted Traditional Income Statement and a Contribution Income Statement 3) Calculate breakeven point for the comipany. Calculate their margin of safety. 4. They would like to know how much their total sales would need to be to achieve a target profit of $100,000. 5. Michelle and Vishayla are thinking of expanding their operation and purchasing the building next door. The new building will cost $250,000 (their only asset) and they expect that their sales would increase by 35% and net operating income to increase by 25%. Calculate their margin, tumover, and return on assets. 6. They appreciate your expertise and would like to hear some of your suggestions on how they can improve their business