A) What is the net operating income (loss) in Year 2 under absorption costing?

B) At the end of Year 1, the companys board of directors set a target for Year 2 of net operating income of $20,000 under absorption costing. If this target is met, a hefty bonus would be paid to the CEO of the company. Keeping everything else the same from above, change the units produced in Year 2 to 4,400 units.

What is the net operating income (loss) in Year 2 under absorption costing?

A . C 1 Chapter 6: Applying Excel 2 3 Data 4 $ 309 5 Selling price per unit Manufacturing costs: Variable per unit produced: Direct materials 6 7 $ 153 8 $ 55 9 $ 37 10 $ 110,000 Direct labor Variable manufacturing overhead Fixed manufacturing overhead per year Selling and administrative expenses: Variable per unit sold Fixed per year 12 $ 9 13 $ 47,000 14 Year 1 Year 2 0 15 16 Units in beginning inventory 17 Units produced during the year 18 Units sold during the year 2,200 2,500 2,300 2,300