1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing. 3. Assuming the manager's bonus is based on net income, which costing method would the manager prefer in the current year? 4. Assuming the manager's bonus is tied to minimizing ending inventory, which costing method would the manager prefer in the currew year? Variable Manufacturing Costs Fixed Manufacturing $10 per unit Overhead $9 $8 $7 $6 per unit $4 per unit $2 per unit $4 (00000) $100,000 per year Selling & Administrative Costs Per Year 45,000 Fixed per year $0 per unit Direct materials Direct labor Variable overhead 85,000 Variable per year Sales Price Callinn Drien Selling Price 100 Doris = $100 per unit Sales Price Selling Price $100 Per Unit Units Produced vs Units Sold Units Sold 1,500 units 10,000 units Units Produced 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Req 1 Req 2 Req 3 and 4 Prepare an income statement for the year using variable costing. WALTMAN CO. Income Statement (Variable Costing) For Year Ended December 31 Sales S 750,000 Less: Variable expenses Variable cost of goods sold $ 120,000 Variable selling and administrative expenses 85,000 Fixed selling and administrative costs 45,000 Gross profit 250,000 500,000 x Less: Cost of goods sold x Direct labor 900 Direct materials 700x Fixed selling and administrative costs 1,600 Income Req 1 Req 2 Req 3 and 4 < Req 1 Req 2 > Prepare an income statement for the year using absorption costing. WALTMAN CO. Income Statement (Absorption Costing) For Year Ended December 31 Sales Cost of goods sold Gross profit Net income Income $ 750,000 120,000 x 500,000 x < Req 1 Req 3 and 4 > Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 and 4 Answer the following questions. 3. Assuming the manager's bonus is based on income, which costing method would the manager prefer in the current year? 4. Assuming the manager's bonus is based on minimizing the cost of ending inventory, which costing method would the manager prefer in the current year? < Req 2 Req 3 and 4 >