Chataqua Can Company manufactures metal cans used in the food processing industry. A case of cans sells for $30. The variable costs of production for one case of cans are as follows: Direct material Direct labor Variable manufacturing overhead Total variable manufacturing cost per case $ 6.50 4.00 5.00 $15.50 Variable selling and administrative costs amount to $0.60 per case. Budgeted fixed manufacturing overhead is $567,000 per year, and fixed selling and administrative cost is $41,000 per year. The following data pertain to the company's first three years of operation. Planned product son (in units) Year 1 Year 2 Year 3 Finished goods inventory (in units), January 1 Actual product son (in units) 1,000 01,000 Sales (in units) 01,000 Finished-goods inventory (in units), December 31 23,500 92,750 11,750 Actual costs were the same as the budgeted costs. Required: 1. Prepare operating income statements for Chataqua Can Company for its first three years of operations using a. Absorption costing b Variable costing 2. Reconcile Chataqua Can Company's operating income reported under absorption and variable costing for each of its first three years of operation. Use the short cut method 3. Suppose that during Chataqua's fourth year of operation actual production equals planned production, actual costs are as expected and the company ends the year with no inventory on hand a What will be the difference between absorption-costing income and variable-costing income in year 4? b What will be the relationship between total operating income for the four-year period as reported under absorption and variable costing Actual costs were the same as the budgeted costs. Required: 1. Prepare operating income statements for Chataqua Can Company for its first three years of operations using a. Absorption costing b. Variable costing 2. Reconcile Chataqua Can Company's operating Income reported under absorption and variable costing for each of its first three years of operation. Use the short cut method. 3. Suppose that during Chataqua's fourth year of operation actual production equals planned production, actual costs are as expected. and the company ends the year with no Inventory on hand. a. What will be the difference between absorption-costing income and variable-costing income in year 4? b. What will be the relationship between total operating Income for the four-year period as reported under absorption and variable costing Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 2 Req 3A Req 3B Prepare operating income statements for Chataqua Can Company for its first three years of operations using absorption costing. Yes t Year 2 Year a $ 0 $ " Selling and Administrative Expenses $ 0 Req 18 > Req 1A Req 18 Req 21 Req 3A Req 3B Prepare operating income statements for Chataqua Can Company for its first three years of operations using variable costing. Variable expenses Ficed expenses $ Year 1 Year 2 Year 3 0 Req 1A Req 18. Req 2 Req 3A Req 3B Reconcile Chataqua Can Company's operating income reported under absorption and variable costing for each of its first three years of operation. Use the shortcut method. Year Difference in fixed. Change in inventory (in units) Predetermined fixed overhead rate overhead expensed under absorption and variable costing 1 2 3 Req 1A Req 18 Req 2 Req 3A Req 3B Suppose that during Chataqua's fourth year of operation actual production equals planned production, actual costs are as expected, and the company ends the year with no inventory on hand. What will be the difference between absorption-costing income and variable-costing income in year 47 Difference in reported income