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.

O'Brien Company manufactures and sells one product. The following information three years of operations: Variable costs per unit Direct materials 3 17 variable manufacturing overhead Fixed Manufacture Fixed selling and administrative expenses 530, 030 $ 140,080 During its first yea reduced 78 090 units and sold 90.090 units. In its third year. O'Brien produced 90.000 units and sold 85,000 units. The selling price of the company's product is $72 per unit. beenmassathe company uses variable costing and a FIFO in g and a FIFO inventory flow assumption (FIFO means first-in first-out In other words, it assumes that the oldest units in inventory are sold first): a. Compute the unit product cost for Year 1, Year 2, and Year 3. b. Prepare an income statement for Year 1, Year 2, and Year 3. Complete this question by entering your answers in the tabs below. Reg 14 Reg 18 Compute the unit product cost for Year 1, Year 2, and Year 3. Product Year 1 Year 2 5 50 50 Year 3 5 50 Prepare an income statement for Year 1. Year 2, and Year 3. O'Brien Company Variable Costing Income Stateme Sales Variable expanses: 9.780 906 8.420 090 5 6.120.000 Variable cost of goods sold 4.000.090 4.500.000 4.250.000 Variable selling and administrative 240.000 270.000 265,000 Total variable expense 4,240.000 4.770.000 4,505,000 Contribution margin 1.520.000 1.710.000 1.815,000 Fixed expenses: Fixed manufacturing overhead 530.000 530,900 Fixed selling and administrative 140.000 140 Total faced expenses 870.000 670.000 Net operating income 2. Assume the company uses variable costing and a LIFO inventory flow assumption ( assumes that the newest units in Inventory are sold fi a. Compute the unit product cost for Year 1, Year 2, and Year 3 b. Prepare an income statement for Year 1. Year 2. and Year 3. Complete this question by entering your answers in the tabs below. Reg 24 Req 28 Compute the unit product cost for Year 1, Year 2, and Year 3. PrCost Wear 1 3 50 50 Year 3 3 O'Brien Company Variable Costing Income Statement Year 1 Year 2 Year 3 B.760.900 8:480,090 5 6.120,000 Variable expenses: Variable cost of goods sold 4,060.000 4.500.000 4.250,000 Variable selling and administrative 240.000 270.000 255.000 Total variable expenses 4,240.000 4.770.000 4.505,000 Contribution margin 1.520,000 1.710.000 1.015.000 Fixed expenses : Fixed manufacturing overhead Fixed selling and administrative 530.000 530.000 530.000 140.000 140.000 140,000 Total faced expenses 670.000 870.000 870.000 Net operating income 5 850,000 1.040.000 5 945,000 y are sold first- Ion (FIFO me unit product cost for Year 1. Year 2. and D. Prepare an income statement for Year 1. Year 2. and Year 3. Complete this question by entering your answers in the tabs below. Req 34 Req 38 Note: Round your intermediate calculations and final answer 58.78 Year 3 3 35. 30 Req 3A Req 38 Note: Round your intermediate calculations to 2 decimal places Absorption Costing Income Stateme Year 1 Sales s 5.780,000 6.480.000 8.120.000 Cost of goods sold 4.436,800 5.068.490 4.755 Gross margin Selling and administrative expenses 380.000 410,000 385.000 Net operating income 1 843.200 5 981.510 5 989.850 assumes that the newest units in Inventory are sold first): a. Compute the unit product cost for Year 1, Year 2, and Year 3 b. Prepare an Income statement for Year 1, Year 2, and Year 3. Complete this question by entering your answers in the tabs below. Reg 44 Req 48 Note? Round your product cost for Year 1. Year 2, and Year 3. imediate calculations and final answers to 2 decimal places. Product Year 1 5 55.40 Year 3 5 55.8 4. Assume the company uses absorption costing and a LIFO inventory flow ass assumes that the newest units In Inventory are sold first): st-in first-out. In other words. It a. Compute the unit product cost for Year 1. Year 2, and Year b. Prepare an income statement for Year 1, Year 2. and Year 3. Complete this que wers in the tabs below. Reg 4A Reg 48 Prepare an income statement for Year 1. Year 2. and Year 3. O'Brien Company Absorption Costing Income Statement Sales $ 5.760,000 8.480,000 8,120,000 Cost of goods sold 4.436.800 5.085.140 4.750.650 Gross margin 1,384.800 Seling and administrative expenses 3 380.000 3 410,000 3 395.00 Net operating income 5 943,200 5 074.860 5 074,350