Summarized data for 2016 (the first year of operations) for Gorman Products, Inc., are as follows:

Required

a. Prepare an income statement based on full absorption costing.

b. Prepare an income statement based on variable costing.

c. Assume that you must decide quickly whether to accept a special one-time order for 1,000 units for $30 per unit. Which income statement presents the most relevant data? Determine the apparent profit or loss on the special order based solely on these data.

d. If the ending inventory is destroyed by fire, which costing approach would you use as a basis for filing an insurance claim for the fire loss? Why?

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Sales (75,000 units) Production costs (80,000 units): Direct material. Direct labor. Manufacturing overhead: Variable.... Fixed. $3,000,000 880,000 720,000 Operating expenses: Variable. Fixed.. Depreciation on equipment Real estate taxes.. Personal property taxes (on inventory and equipment) Personnel department expenses. 544,000 320,000 168,000 240,000 60,000 18,000 28,800. 30,000