ACG3301-Spring 2021 (Online) Homework: Chapter 6 Homework Score: 0.86 of 1 pt E6-42A (similar to) The annual data that follows pertain to See It a manufacturer of swimming goggles (the company had no beginning inventory) E: (Click the icon to view the data) Read the requirements Data Table - Contribution Margin (Variable Costing) Income Statement For the Year Ended December 31 S 8,858,000 $ 43 $ 24 $ 4,944.000 $ 7 1,442,000 Sales revenue Less Variable expenses Variable cost of goods sold Variable operating expenses Contribution margin Less Fixed expenses Fixed manufacturing overhead Fixed operating expenses Sales price... Variable manufacturing expense per unit Sales commission expense per unit Fixed manufacturing overhead Fixed operating expenses. Number of goggles produced Number of goggles sold S 1.980.000 235,000 2,472,000 220.000 206.000 1.980.000 235.000 Operating income $ 257,000 Print Done Requirement 2. Which statement shows the higher operating income? Why? Absorption costing operating income is higher than variable costing operating income. This is because absorption costing defers S 126,000 of fixed manufacturing overhead as an asset in ending inventory. In contrast, variable costing expenses all of the fixed manufacturing overhead during the year Variable costing expenses S 126.000 more less than absorption costing income the year. costs during the year, so variable costing operating income is 5 126 000 Requirement 3. The company marketing vice president believes a new sales promotion that costs $155,000 would increase sales to 220.000 goggles Use the contribution margin income statement format to evaluate the sales promotion Increase in contribution margin Increase in fixed expenses Increase in operating income Enter any number in the edit fields and then click Check Answer 1 par remaining SA