Chesser produces jet bridges for many domestic and international airports. Cost information for Chesser's jet bridges is as follows: E (Click the icon to view the cost information.) Additional information for the first three quarters of 2020 for Chesser are shown below: (Click the icon to view the additional information for the first three quarters.) Chesser's controller, Matt, wishes to analyze the difference in the income statements between throughput costing, absorption costing, and variable costing for the first 3 quarters of 2020. Assume no beginning inventory. Read the requirements Requirement 1. Prepare an absorption costing income statement. (Complete all input fields. Enter a 0 for any zero balance accounts. Use a minus sign or parentheses for a net loss. Abbreviation used: DM = direct materials: SG&A = selling, general and administrative.) Quarter 1 Quarter 2 Quarter 3 Absorption Costing: Revenues Cost of goods available for sale MIT Net income (loss) Requirement 2. Prepare a variable costing income statement. (Complete all input fields. Enter a 0 for any zero balance accounts. Use a minus sign or parentheses for a net loss.) Variable Costing: Quarter 1 Quarter 2 Quarter 3 Revenues Cost of goods available for sale Net income (loss) Requirement 3. Prepare a throughput costing income statement. (Complete all input fields. Enter a 0 for any zero balance accounts. Use a minus sign or parentheses for a net loss.) Throughput Costing: Quarter 1 Quarter 2 Quarter 3 Revenues Cost of goods available for sale TIITI Net income (loss) Requirement 4. Explain the difference in the net income under each costing method. The costing method aborbs the most costs into inventory, followed by the costing method, with the costing method absorbing the least amount of costs into inventory. As a result, based on our scenario here where ending inventory is between the three quarters, the costing method results in the highest amount of net income, followed by the costing method, with the costing method resulting in the lowest amount of net income for each of the three quarters. Requirement 5. Based on the information provided, which costing method do you believe Chesser is currently using to calculate the bonus for the production manager? Why? each quarter with no credible reason. Using costing will increase Based on the information provided, Chesser is likely using the costing method to calculate the bonus for the production manager because inventory is net income by the amount of costs absorbed into inventory, thus providing the managers with a higher bonus. Requirement 6. If Q4 sales were 76 and 04 actual and budgeted production was 61, what difference would you expect in Q4 income between absorption costing and variable costing? Why? If Q4 sales are 76 and Q4 production is 61, ending inventory would At a fixed manufacturing cost per unit of calculated with absorption costing to be by units we would expect net income than variable costing - Data Table $ $ 6,000 $ 2.900 CA 5,800 $ Variable costs per jet bridge: Materials Labor Manufacturing Overhead Selling General and administrative Fixed costs for the first 3 quarters of 2020: Manufacturing Overhead Selling General and administrative 1,100 1,000 CA $ 943,500 allocated based on budgeted production $ 440,000 $ 905,000 Print Done Data Table 1st Quarter 2nd Quarter 3rd Quarter 71 76 75 71 76 75 67 70 66 Budgeted production Actual production Sales Sales price: $31,000 per jet bridge Fixed selling costs by quarter Fixed G&A costs by quarter 150,000 385,000 150,000 260,000 140,000 260,000 Print Done Chesser produces jet bridges for many domestic and international airports. Cost information for Chesser's jet bridges is as follows: E (Click the icon to view the cost information.) Additional information for the first three quarters of 2020 for Chesser are shown below: (Click the icon to view the additional information for the first three quarters.) Chesser's controller, Matt, wishes to analyze the difference in the income statements between throughput costing, absorption costing, and variable costing for the first 3 quarters of 2020. Assume no beginning inventory. Read the requirements Requirement 1. Prepare an absorption costing income statement. (Complete all input fields. Enter a 0 for any zero balance accounts. Use a minus sign or parentheses for a net loss. Abbreviation used: DM = direct materials: SG&A = selling, general and administrative.) Quarter 1 Quarter 2 Quarter 3 Absorption Costing: Revenues Cost of goods available for sale MIT Net income (loss) Requirement 2. Prepare a variable costing income statement. (Complete all input fields. Enter a 0 for any zero balance accounts. Use a minus sign or parentheses for a net loss.) Variable Costing: Quarter 1 Quarter 2 Quarter 3 Revenues Cost of goods available for sale Net income (loss) Requirement 3. Prepare a throughput costing income statement. (Complete all input fields. Enter a 0 for any zero balance accounts. Use a minus sign or parentheses for a net loss.) Throughput Costing: Quarter 1 Quarter 2 Quarter 3 Revenues Cost of goods available for sale TIITI Net income (loss) Requirement 4. Explain the difference in the net income under each costing method. The costing method aborbs the most costs into inventory, followed by the costing method, with the costing method absorbing the least amount of costs into inventory. As a result, based on our scenario here where ending inventory is between the three quarters, the costing method results in the highest amount of net income, followed by the costing method, with the costing method resulting in the lowest amount of net income for each of the three quarters. Requirement 5. Based on the information provided, which costing method do you believe Chesser is currently using to calculate the bonus for the production manager? Why? each quarter with no credible reason. Using costing will increase Based on the information provided, Chesser is likely using the costing method to calculate the bonus for the production manager because inventory is net income by the amount of costs absorbed into inventory, thus providing the managers with a higher bonus. Requirement 6. If Q4 sales were 76 and 04 actual and budgeted production was 61, what difference would you expect in Q4 income between absorption costing and variable costing? Why? If Q4 sales are 76 and Q4 production is 61, ending inventory would At a fixed manufacturing cost per unit of calculated with absorption costing to be by units we would expect net income than variable costing - Data Table $ $ 6,000 $ 2.900 CA 5,800 $ Variable costs per jet bridge: Materials Labor Manufacturing Overhead Selling General and administrative Fixed costs for the first 3 quarters of 2020: Manufacturing Overhead Selling General and administrative 1,100 1,000 CA $ 943,500 allocated based on budgeted production $ 440,000 $ 905,000 Print Done Data Table 1st Quarter 2nd Quarter 3rd Quarter 71 76 75 71 76 75 67 70 66 Budgeted production Actual production Sales Sales price: $31,000 per jet bridge Fixed selling costs by quarter Fixed G&A costs by quarter 150,000 385,000 150,000 260,000 140,000 260,000 Print Done