(20 minutes) Frank's Furters Inc. makes hotdogs for grocery stores. The hotdogs are frozen and can last in storage for years. Cost information for the hotdogs are: "Meat" used for hotdogs $180,000 Wages used to make hotdogs $95,000 Overhead of the factory variable $45,000 fixed $65,000 Office staff $65,000 Sales staff $110,000 Frank's Salary $55,000 Frank made 500,000 hotdogs this past year but only sold 450,000 to his customers. He sells them for $1.50 per hotdog. Frank tells you that the office and sales staff are variable costs while his salary is fixed. Instructions a) Calculate Frank's income assuming he uses absorption costing. b) Calculate Frank's income assuming he uses variable costing. c) What is this past year's gross profit and contribution margin? d) Which method (absorption vs. variable) should Frank use to analyze income for the period? e) Reconcile the difference between income under absorption costing versus variable costing. (ie. Provide a short calculation that explains the difference in income. We did this in class.)