Requirements Prepare an income statement in reasonably good form for Polly Plates’ 20x0 year. Use the absorption costing format (also known as the “GAAP” or “external financial reporting” format). One of the board members, hearing of the net loss expected for 20x0 at the first board meeting described above, asked whether anyone knew how many plates the company would need to sell to break even. Calculate PPI’s breakeven point (in plates) using 20x0’s cost structure. Recall that a company’s cost structure is its selling price per unit, variable cost per unit, and total fixed cost. Another board member at the 20x0 meeting responded to that query, asking, “Who cares what it takes to make zero net income? I’d like to know what sales would be necessary to make $2 million a year… as we did in the old days! Harrumph!” Calculate the sales (in plates) PPI needed to yield a net income of $2 million, using 20x0’s cost structure. As the discussion about breakeven points and profit planning wound down, an elderly board member awoke from his nap, saw the breakeven charts on the projection screen, and mumbled something about “direct costing.” His granddaughter (also on the board and a recent MBA graduate) responded by saying, “Wait! I think I remember that term. Yes, in fact, you can do a whole income statement using direct costing. In Professor Blatterfitzel’s class, we called it ‘variable costing’ or the ‘contribution margin format income statement,’ or something like that.” Prepare an income statement in reasonably good form for PPI’s 20x0 year using variable costing (also called “direct costing” or “the contribution margin format”). Prepare the GAAP (absorption costing format) income statement in reasonably good form for PPI’s 20x1 year (show the results just as the controller would have … before taxes and Deb’s bonus). Calculate PPI’s 20x1 ending inventory amount (under absorption costing), in both plates and dollars. Prepare PPI’s 20x1 income statement in reasonably good form using variable costing (also called direct costing or contribution margin format costing). Show the net income before taxes and before Deb’s bonus so it is comparable to Robin’s absorption cost net income. Assume that you are a member of PPI’s board of directors and you receive an email from an R. J. Squirl at Kernel Mills requesting a reference check on Deb Bett. Assume further that you have completed thoughtfully the preceding three requirements and that you have excellent liability insurance that fully indemnifies you for any statements you make as a board member. Write the text of an email (200 words or less) that expresses your honest opinion of Deb Bett’s performance during her one year as president of PPI.