1. ABC Manufacturing Co. is currently working on two jobs. The job order cost sheets for Job 101 and Job 102 provide the following information: Job 1 Job 2 Direct Materials $ 12,000 $ 15,000 Direct Labor $ 24,000 $ 45,000 ABC applies overhead to jobs at 60% of direct labor cost. Job 102 is finished and has been sold for $100,000. ABCs gross margin on Job 102 is Multiple Choice $87,000. $40,000. $27,000. $13,000.

2. Dilia Company incurred manufacturing overhead cost for the year as follows: Direct materials $ 50 /unit Direct labor $ 35 /unit Manufacturing overhead Variable $ 15 /unit Fixed ($25/unit for 1,500 units) $ 37,500 Variable selling and administrative expenses $ 10,500 Fixed selling and administrative expenses $ 20,000 The company produced 1,500 units and sold 1,200 of them at $225 per unit. Assume that the production manager is paid a 2 percent bonus based on the companys net income. Required Prepare an income statement using absorption costing. Prepare an income statement using variable costing. Determine the managers bonus using each approach. Which approach would you recommend for internal reporting?