39 A A Sales price.............................$ Variable manufacturing expense.per.unit Sales commission expense.per.unit ........ Fixed manufacturing overhead .... Fixed operating expenses ............ Number of goggles. produced ... A A 1,640,000 230,000 205,000 183,000 Number of goggles sold ... U M UMMODUL . . . . . . . . . . . . . . . . . . Requirements 1. Prepare both conventional (absorption costing) and contribution margin (variable costing) income statements for See It for the year. 2. Which statement shows the higher operating income? Why? 3. The company marketing vice president believes a new sales promotion that costs $150,000 would increase sales to 205,000 goggles. Should the company go ahead with the promotion? Give your reason. For the Year Ended December 31 Less: Less: Operating expenses Use the contribution margin income statement format to evaluate sales promotion. (PLEASE SHOW WORK ON HOW YOU GET YOUR ANSWER) Increase in contribution margin Increase in fixed expenses Increase in operating income