Lambeth Company has capacity to produce 150,000 units annually of its sole product.

Lambeth Company has capacity to produce 150,000 units annually of its sole product.Budgeted sales for the coming year are 100,000 units, yielding the following budgeted income statement (in dollars).Budgeted manufacturing cost per unit is $60 at that volume.Lambeth sells its entire production each year.Sales10,000,000Fixed manufacturing costs1,800,000Variable manufacturing costs4,200,0006,000,000Gross margin4,000,000Variable selling expense1,000,000Fixed SG&A expense2,000,0003,000,000Net Income1,000,000Answer the following independent questions:a)If, because of declining demand, Lambeth produces and sells only 90,000 units,what will net incomebe?b)How many units must be produced and sold to yield a net income of $1,200,000?c)The sales staff believes that 115,000 units can be sold if the price is cut to $92/unit.Would this move be profitable? Explain.d)Lambeth could lease a more efficient machine for one of its production lines.This machine would cut variable manufacturing costs by 10%, without affecting other costs or sales.Would Lambeth be willing to pay $300,000 annually to lease this machine? Explain.