Zzip Company manufactures skateboards, which currently sell for $38.00. The skateboards are manufactured in an antiquated plant that relies heavily on direct labour workers. Thus, variable costs. are high, totalling $22.80 per skateboard, of which 60% is direct labour cost. Over the past year, the company sold 40,000 skateboards, with the following operating results: Sales (40,000 skateboards) $1,520,000 Variable expenses 912,000 Contribution margin 608,000 Fixed expenses 480,000 Net operating income $ 128,000 Management is anxious to maintain and perhaps even improve its present level of income from the skateboards. Required: A) Compute the break-even point in skateboards, and the degree of operating leverage at last year's level of sales. B) The company is worried that labour rates may increase in future years, increasing manufacturing costs. The company does not believe that it will be able to increase its selling prices to maintain current net income levels, due to the competitiveness of the skateboard market. Consequently, the company is considering the construction of a brand new, automated plant. Using the same sales level of $1,520,000, the new plant would slash variable costs by 40%, but it would cause fixed costs to increase by 90%. If the new plant is built, what would be the company's new break-even point in skateboards? C) If the new plant is built, how many skateboards will have to be sold next year to earn the same net operating income as last year of $128,000? What would be the new degree of operating leverage? D) If you were a member of top management, would you be in favour of constructing the new plant? Clearly but concisely explain. Base your answer on the calculations you conducted above, as well as on qualitative factors