Answer each question as if you were the managerial accountant for the company and are presenting to the company vice-president regarding the information requested in the case study. You must not only give the correct numbers but also explain to management what variable costing is, why variable costing is useful and why the net income is different for absorption vs variable costing and also why net income is different for LIFO vs FIFO. Then follow the explanation up with a recommendation for management reporting. For each answer explain the terminology and concepts used. For example, rather than just give theproduct costet income, explain the calculation - this is a professional report from a managerial accountant to the company vice-president.Use outside sources when necessary BUT MAKE SURE YOU CITE THEM!When giving a recommendation, back it up with numbers. Make sure you address the original dilemma - lowest bid in different situations.

Req 3A Req 3B Prepare an income statement for Year 1, Year 2, and Year 3. Note: Round your intermediate calculations to 2 decimal places. O'Brien Company Absorption Costing Income Statement Year 1 Year 2 Year 3 Sales $ 5,467,000 $ 6,958,000 $ 5,467,000 Cost of goods sold 4,291,210 5,526,320 4,365,870 Gross margin 1, 175,790 1,431,680 1, 101, 130 Selling and administrative expenses 284,000 326,000 284,000 Net operating income $ 891,790 $ 1, 105,680 $ 817,130