2. Change all of the numbers in the data area of your worksheet so that it looks like this: B 1 Chapter 7: Applying Excel 2 3 Data 4 $ 394 5 Selling price per unit Manufacturing costs: Variable per unit produced: Direct materials 6 7 $ 157 8 $ 76 9 $ 30 10 $ 173,600 Direct labor Variable manufacturing overhead Fixed manufacturing overhead per year Selling and administrative expenses: Variable per unit sold Fixed per year 11 12 $ 3 13 76,000 14 15 Year 1 Year 2 16 0 17 Units in beginning inventory Units produced during the year Units sold during the year 3,100 2,900 2,800 2,900 18 If your formulas are correct, you should get the correct answers to the following questions. (a) What is the net operating income (loss) in Year 1 under absorption costing? (b) What is the net operating income (loss) in Year 2 under absorption costing? (c) What is the net operating income (loss) in Year 1 under variable costing? (d) What is the net operating income (loss) in Year 2 under variable costing? 3. Make a note of the absorption costing net operating income (loss) in Year 2. At the end of Year 1, the company's board of directors set a target for Year 2 of net operating income of $200,000 under absorption costing. If this target is met, a hefty bonus would be paid to the CEO of the company. Keeping everything else the same from part (2) above, change the units produced in Year 2 to 5,600 units. (a) Would this change result in a bonus being paid to the CEO? 0 Yes (b) What is the net operating income (loss) in Year 2 under absorption costing? (c) Would this doubling of production in Year 2 be in the best interests of the company if sales are expected to continue to be 2,900 units per year? O Yes O No