addison, Inc. makes a single product, an indoor fireplace, and has provided data from last year of operations. The Controller has asked you to compare income statements if the company used the variable costing approach vs. the absorption costing report. Use the information included in the Excel Simulation and the Excel functions described below to complete the task.

• Cell Reference: Allows you to refer to data from another cell in the worksheet. From the Excel Simulation below, if in a blank cell, =B3 was entered, the formula would output the result from cell B3, or 420 in this example.
• Basic Math functions: Allows you to use the basic math symbols to perform mathematical functions. You can use the following keys: + (plus sign to add), - (minus sign to subtract), * (asterisk sign to multiply), and / (forward slash to divide). From the Excel Simulation below, if in a blank cell =B15+B16 was entered, the formula would add the values from those cells and output the result, or 9,500 in this example. If using the other math symbols the result would output an appropriate answer for its function.
• SUM function: Allows you to refer to multiple cells and adds all the values. You can add individual cell references or ranges to utilize this function. From the Excel Simulation below, if in a blank cell =SUM(B6,B7,B8) was entered, the formula would output the result of adding those three separate cells, or 215 in this example. Similarly, if in a blank cell =SUM(B6:B8) was entered, the formula would output the same result of adding those cells, except they are expressed as a range in the formula, and the result would be 215 in this example.

\begin{tabular}{|l|l|l|} \hline 35 & & \\ \hline 36 & Compute the number of fireplaces required to breakeven & \\ \hline 37 & & \\ \hline 38 & 2. Assume the company uses absorption costing: & \\ \hline 39 & & \\ \hline 40 & Compute the unit product cost for one fireplace & \\ \hline 41 & & \\ \hline 42 & Prepare an income statement for the year & \\ \hline 43 & & \\ \hline 44 & Sales & \\ \hline 45 & Cost of goods sold & \\ \hline 46 & Gross margin & \\ \hline 47 & Selling and administrative expenses & \\ \hline 48 & Net operating income & \\ \hline 49 & & \\ \hline 50 & & \\ \hline 51 & & \\ \hline 52 & & \\ \hline \end{tabular}