The fixed cost allocation rate is based on expected sales and is therefore equal

The fixed cost allocation rate is based on expected sales and is therefore equal to $120000/10000 books = $12 per bookLeslie has decided to produce either 10000 12000 or 16000 books.1. Calculate expected gross margin if Leslie produces 10000 12000 or 16000 hooks. (Make sure you include the production-volume variance as part of cost of goods sold)2. Calculate ending inventory in units and in dollars for each production level.3. Managers who are paid a bonus that is a function of gross margin may be inspired to produce product in excess of demand to maximize their own bonus. The chapter suggested metrics to discourage managers from producing products in excess of demand. Do you think the following metrics will accomplish this objective? Show your work.a. Incorporate a charge of 10% of the cost of the ending inventory as an expense for evaluating the manager.b. Include non-financial measures when evaluating management and rewardingperformance.