Che Required information Use the following information to answer questions 42-44 The following information applies to the questions displayed below.) Lehighton Chalk Company manufactures sidewalk chalk, which it sells online by the box at $25 per unit. Lehighton uses an actual costing system, which means that the actual costs of direct material direct labor, and manufacturing overhead are entered into work-in-process inventory. The actual application rate for manufacturing overhead is computed each year, actual manufacturing overhead is divided by actual production (in units) to compute the application rate. Information for Lehighton's first two years of operation is as follows: Year 1 2,5ee 3, 10e Year 2 2,500 1,900 Sales (in units) Production (in units) Production costs: Variable manufacturing costs Fixed manufacturing overhead Selling and administrative costs: Variable Fixed $15,190 18,290 $ 9,310 18, 290 1 , 9, eee 10,000 9,000 Selected information from Lehighton's year-end balance sheets for its first two years of operation is as follows: LEHIGHTOW CHATY LEHIGHTON CHALK COMPANY Selected, Balance Sheet Information Based on absorption costing End of Year 1 Finished-goods inventory $ 6,480 Retained earnings 11, eee Based on variable costing End of Year 1 Finished-goods inventory $ 2,940 Retained earnings 7,460 End of Year 2 $ @ 17,720 End of Year 2 $ 17,720 Required: 1. Reconcile Lehighton's operating income reported under absorption and variable costing, during each year, by comparing the following two amounts on each income statement Cost of goods sold Fixed cost (expensed as a period expense) 2. What was Lehighton's total operating income across both years under absorption costing and under variable costing 3. What was the total sales revenue across both years under absorption costing and under variable costing? 4. What was the total of all costs expensed on the operating income statements across both years under absorption costing and under variable costing? 5. Subtract the total costs expensed across both years (requirement 4) from the totat sales revenue across both years (requirement 3) (a) under absorption costing and (b) under variable costing 6. Considering the results obtained in requirements 1-5 above, evaluate the following statements