1 Question 2 10 Marks 25 Minutes Big Pros Inc. calculates income under absorption costing. The company provides bonuses to managers based on the operating income of the division. In 2021, the Body division has the following financial results: 2 3 4 Sales (50,000 units) $ 6,000,000 5 Cost of Goods Sold 6 Opening Inventory $ 7 Cost of Goods Manufactured (60,000 units) 8 Variable Costs $ 1,500,000 9 Fixed Costs $ 1,500,000 10 $ 3,000,000 11 Ending Inventory -$ 500,000 12 COGS $ 2,500,000 13 Gross Margin $ 3,500,000 14 Selling and Admin Expenses 15 Variable $ 500,000 16 Fixed $ 800,000 17 18 Operating Income 19 $ $ 20 The old manager for the Body division left in early 2021. A new manager was hired in 2022. The new manager produced 55,000 units and sold 58,000 units in 2022. 21 1,300,000 2,200,000 22 REQUIRED 23 A) Calculate the operating income for 2022 using absorption costing. Use an income statement to show your work. 24 B) Calculate the operating income for 2022 using variable costing. Do not use an income statement as part of your calculation. 25