The Creamy Pig Ice Cream Maker is a hypothetical company knownfor its bacon-flavored ice cream. The Creamy Pigmiscalculated the popularity of the bacon craze. Thecompany’s bacon-flavored ice cream did not sell very well and thecompany is going out of business at the end of April. Thecompany has a negative profit (loss) of $100,000 on sales of 25,000gallons of ice cream. The Creamy Pig has variable inputs oflabor, cream, and sugar and a fixed input of a factory which iscovered by a bank loan. For each gallon of ice creamproduced, labor costs $4, cream costs $2, sugar costs $1, and aloan payment costs $2. Assume that The Creamy Pig sells allof the gallons of bacon-flavored ice cream that it produces. Consider the following statements and determine which of the answerchoices is correct.? give reason

1. The Creamy Pig’s price per gallon of ice cream is $5 and itsaverage variable cost is $7.
2. The Creamy Pig’s fixed cost is greater than its totalrevenue.