Use the data in this spread-sheet to answerthe Chapter 5 Quiz [quiz #4] Luke Corporation produces a variety of products, each within their own division. last year, the managers at Luke developed and began marketing a new chewing gum, Bubbs, to sell in vending machines. The product, which sells for $5.25 per case, has not had the market succas that managers expected, and the company is considering dropping Bubbs. Additional Information: 1. The productline income statement for the past 12 months is shown in Table 1. 2. All products at Luke receive an allocation of corporate overhead costs, which is computed as 5 percent otthe product's gross revenue. The 5 percent rate is based on the most recent year's corporate costs divided by corporate revenues. Data on corporate costs and revenues for the past two years are shown in Table 2. You may assume the xed corporate overhead is $1,454,000 in each year. None of these xed costs are specically traceable to Bubbs. 3. Roy 0. Andre, the product manager for Bubbs, is concerned about whether the product will be dropped by the company and has employed you as a nancial consultant to help with some analysis. In addition to the information given above, Mr. Andre provides you with the data in Table 3 on the Bubbs montth product costs. 4. Table 4 presents the results of a regression analysis of the data in Table 3. Table 4. Regression Analysis of Table 3 Monthly Production Data R 23! 28510\" Statistics Multiple R 0.962 R Square 0.925 Adjusted R Square 0.918 Standard Error 12,833.593 Observations 12.000 Coecr'ents Standard Error 1'3th Pvohre Intercept 513,850 53,525 11.4? 0.0000 Cases 2.5474 0.23 11.12 0.0000 Table 1. Product Line Income Statement for Bubbs 12 months Revenue Costs Manufacturing costs 514,440,393 Aomted corporate costs 134,108 Productinc margin Allowance for tax (@2093) Productme prot (loss) Table 2. ate Revenues Most recent year $106,130,000 Previous year 516,200,000 Fixed Corporate OH is $1,454,000 in each year Table 3. Monthly Production and Production Costs Month Cases 1 201,000 2 211,200 3 214,800 4 223,000 3 224,400 6 231,000 1 220,200 8 241,200 9 238,800 10 232,600 11 230,200 12 239,200 wwwwwwwwwwww 514,682,130 13,114,303 (5492333) 93,410 (5393333) OH Costs 53 331,300 54,221,000 Prod. Costs 1,139,323 1,161328 1,169,981 1,133,323 1,181,821 1,208,613 1,183,699 1,226,114 1,223,226 1,231323 1,241,160 1,212,431