2. Change all of the numbers in the data area of your worksheet so that it looks like this: A 1 Chapter 6: Applying Excel 2 3 Data 4 Selling price per unit B $ 346 46 S 9 7 Manufacturing costs: Variable per unit produced: Direct materials 120 8 Direct labor $ 78 9 Variable manufacturing overhead $ 24 10 Fixed manufacturing overhead per year $ 109,200 11 Selling and administrative expenses: 12 Variable per unit sold $ 8 13 Fixed per year $ 54,000 14 15 Year 1 Year 2 16 Units in beginning inventory 0 17 Units produced during the year 2,600 2,100 18 Units sold during the year 2,300 2,300 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? Net operating loss (b) What is the net operating income (loss) in Year under absorption costing? 2 (c) What is the net operating income (loss) in Year 1 under variable costing? ces (d) What is the net operating income (loss) in Year 2 under variable costing? e) The net operating income (loss) under absorption costing is less than the net operating income (loss) under variable costing in Year 2 because (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Units were left over from the previous year The cost of goods sold is always less under variable costing than under absorption casting Sales exceeded production so some of the fixed manufacturing overhead of the period was released from inventories under absorption 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 $150,000 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 4,200 units (a) Would this change result in a bonus being paid to the CEO? O Yes O NO (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 2,300 units per year? O Yes O No