2. Change all of the numbers in the data area of your worksheet so that it looks like this:

Selling Price	$ 271
Variable Manufactoring per unit
Direct Materials	$ 116
Direct Labor	$ 52
Variable Manufactoring Overhead	$ 31
Fixed Manufactoring Overhead	$ 162,000
Selling & Administration Expenses
Varible per unit sold	$ 3
Fixed per year	$ 72,000
	Year 1	Year 2
Units in beginning inventory	0
Units produced	3000	2700
Units sold	2800	2800

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?