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Wade Corporation produces a molded plastic casing, M&M101, for many cell phones currently on the market. Summary data from its 2017 income statement follows. Janell Vang, Wade's president, is very concerned about Wade Corporation's poor profitability. (Click the icon to view the summary data.) (Click the icon to view the additional information.) Read the requirements - X Data table More info Requirement 1. Calculate Wade Corporation's breakeven revenues for 2017. Begin by determining the formula to calculate Wade Corporation's 2017 contribution margin percentage. Contribution margin % Revenues Wade Corporation's 2017 contribution margin percentage is Variable costs 5,000,000 3,500,000 1,560,000 Now determine the formula to calculate Wade Corporation's breakeven revenues for 2017 Fixed costs $ (60,000) Breakeven revenues Operating income She asks Virgil Whitley, production manager, and Seth Cooke, controller, to see if there are ways to reduce costs. After 2 weeks, Virgil returns with a proposal to reduce variable costs to 61% of revenues by reducing the costs Wade currently incurs for safe disposal of wasted plastic. Seth and Virgil have the following conversation: Seth is concerned that this would expose the company to potential environmental liabilities. He tells Virgil, "We would need to estimate some of these potential environmental costs and include them in our analysis." "You can't do that," Virgil replies. "We are not violating any laws. There is some possibility that we may have to incur environmental costs in the future, but if we bring it up now, this proposal will not go through because our senior management always assumes these costs to be larger than they turn out to be. The market is very tough, and we are in danger of shutting down the company and costing all of us our jobs. The only reason our competitors are making money is because they are doing exactly what I am proposing." Wade Corporation's breakeven revenues amount for 2017 is $ Requirement 2. Calculate Wade Corporation's breakeven revenues if variable costs are 61% of revenues. Print Done Wade Corporation's breakeven revenues will be $ if variable costs are 61% of revenues. Requirement 3. Calculate Wade Corporation's operating income for 2017 if variable costs had been 61% of revenues. Revenues Print Done Variable costs Fixed costs Operating income/(loss) Requirement 4. Given Virgil Whitley's comments, what should Seth Cooke do? O A. Following Virgil Whitley's recommendation would be ethical. Estimates of environmental costs and liabilities should not be included in the analysis since the company would not be violating any laws. OB. Following Virgil Whitley's recommendation would be unethical but, should be done since it might keep the company from having to shut down. OC. Following Virgil Whitley's recommendation would be ethical since it is in the best interest of the company and its employees. OD. Following Virgil Whitley's recommendation would be unethical. Estimates of environmental costs and liabilities should be included in the analysis. If Virgil still insists on modifying the numbers and reporting lower environmental costs, Seth should raise the matter with one of Virgil's superiors