207 (226 of 861) 5-BI Contributi The following infomation ycar ending Deoember 31,2012. There were no beginning or ending inventorics. is taken from the rocords of the Zealand Manufacturing Company for the $14,000,000 Long-term rent, factory $ 85,000 Advertising Shipping expenses 470,000 430,000 320,000 Factory superintendent's salary Factory supervisors' salarics Direct materials used 31,000 105,000 3,500,000 1,700,000 53,000 42,000 99,000 950,000 430,000 100,000 Direct labor Cutting bits used Factory methods research Abrasives for machining Administrative clerical salaries (variable)370,000 Fire insurance on factory equipment 4,000 Indirect labor Property taxes on factory equipment 26,000 Depreciation on factory equipment 1. Prepare a contribution income statement and an absorption income statement. If you are in doubt about any cost behavior pattern, decide on the basis of whether the total cost in question will fluctuate substantially over a wide range of volume. Prepare a separate supporting schedule of indirect manufacturing costs subdivided between variable and fixed costs. 2. Suppose that all variable costs fluctuate directly in proportion to sales, and that fixed costs are unaffected over a wide range of sales. What would operating income have been if sales had been $12 million instead of $14 million? Which income statement did you use to help get your answer? Why? 5-B2 Special Order, Terminology, and Unit Costs t is the income statement of Pelle Company, a manufacturer of men's blue jeans