8-35 Variable-Costing and Absorption-Costing Income Statements (LO 8-2, 8-3,8-4, 8-6) Great Outdoze Company manufactures sleeping bags, which sell for $65.90 each. The variable costs of production are as follows: Direct material Direct labor Variable manufacturing overhead $19.30 10.60 7.40 Budgeted fixed overhead in 20x1 was $149,600 and budgeted production was 22,000 sleeping bags. The year's actual production was 22,000 units, of which 19,500 were sold. Variable selling and administrative costs were $1.70 per unit sold; fixed selling and administrative costs were $25,000. Required: 1. Calculate the product cost per sleeping bag under (a) absorption costing and (b) variable costing. 2-a. Prepare an operating income statement for the year using absorption costing. 2-b. Prepare an operating income statement for the year using variable costing. 3. Reconcile reported operating income under the two methods using the shortcut method. 3 1 points Prepare an operating income statement for the year using absorption costing. (Do not GREAT OUTDOZE, INC. Operating Income Statement For the Year Ended December 31, Sales revenue Less: Cost of goods sold Gross margin 20x1 Absorption Costing Selling and Administrative Expenses Fixed selling and administrative $ 0 Operating income SA $ 0