could you please help me to find the answers for all the red spots?

eturn to question Starfax, Inc., manufactures a small part that is widely used in various electronic products such as home computers. Results for the first three years of operations were as follows (absorption costing basis): Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income (loss) Year 1 $ 844,800 612,480 232, 320 200, 640 $ 31,680 Year 2 $ 675,840 422,400 253, 440 190,080 $ 63,360 Year 3 $ 844,800 654,720 190,080 179,520 $ \10,560 In the latter part of Year 2, a competitor went out of business and in the process dumped a large number of units on the market. As a result, Starfax's sales dropped by 20% during Year 2 even though production increased during the year. Management had expected sales to remain constant at 52,800 units; the increased production was designed to provide the company with a buffer of protection against unexpected spurts in demand. By the start of Year 3, management could see that it had excess inventory and that spurts in demand were unlikely. To reduce the excessive inventories, Starfax cut back production during Year 3, as shown below: Production in units Sales in units Year 1 52,800 52,800 Year 2 63,360 42,240 Year 3 42,240 52,800 Additional information about the company follows: a. The company's plant is highly automated. Variable manufacturing expenses (direct materials, direct labor, and variable manufacturing overhead) total only $2.00 per unit, and fixed manufacturing overhead expenses total $506,880 per year. b. A new fixed manufacturing overhead rate is computed each year based on that year's actual fixed manufacturing overhead costs # Return to question AUUMUI di IOI LION DUUULLE LUMPaily TUNTUWS. 2 a. The company's plant is highly automated. Variable manufacturing expenses (direct materials, direct labor, and variable manufacturing overhead) total only $2.00 per unit, and fixed manufacturing overhead expenses total $506,880 per year. b. A new fixed manufacturing overhead rate is computed each year based on that year's actual fixed manufacturing overhead costs divided by the actual number of units produced. c. Variable selling and administrative expenses were $1 per unit sold in each year. Fixed selling and administrative expenses totaled $142,240 per year. d. The company uses 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.) Starfax's management can't understand why profits doubled during Year 2 when sales dropped by 20% and why a loss was incurred during Year 3 when sales recovered to previous levels. Required: 1. Prepare a variable costing income statement for each year. 2. Refer to the absorption costing income statements above. a. Compute the unit product cost in each year under absorption costing. Show how much of this cost is variable and how much is fixed. b. Reconcile the variable costing and absorption costing net operating income figures for each year. 5b. If Lean Production had been used during Year 2 and Year 3, what would the company's net operating income (or loss) have been in each year under absorption costing? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Prepare a variable costing income statement for each year. Starfax, Inc. Variable Costing Income Statement Year 1 Year 2 Year 3 Sales $ 844,800 $ 675,840 $ 844,800 Variable expenses: Variable cost of goods sold 105,600 84,480 105,600 Variable selling and administrative expenses 52,800 42,240 52,800 Fixed selling and administrative expenses 158.400 126,720 158,400 Depreciation 686,400 549, 120 X 686,400 Total variable expenses 1,003,200 802,560 1,003,200 Gross margin (158,400) (126,720) (158,400) Fixed expenses: Fixed manufacturing overhead 506,880 506,880 506,880 Fixed selling and administrative expenses 142,240 142,240 142,240 Advertising 0 0 0 Beginning merchandise inventory 0 0 0 Total fixed expenses 649,120 649,120 649,120 $ $ Net operating income (loss) (807,520) (775,840) $ (807,520) NELMquestion Required: 1. Prepare a variable costing income statement for each year. 2. Refer to the absorption costing income statements above. a. Compute the unit product cost in each year under absorption costing. Show how much of this cost is variable and how much is fixed. b. Reconcile the variable costing and absorption costing net operating income figures for each year. 5b. If Lean Production had been used during Year 2 and Year 3, what would the company's net operating income (or loss) have been in each year under absorption costing? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req 2B Req SB $ Compute the unit product cost in each year under absorption costing. Show how much of this cost is variable and how much is fixed. (Do not round intermediate calculations and round your final answers to 2 decimal places.) Year 1 Year 2 Year 3 Variable manufacturing cost 2.00 2.00$ 2.00 Fixed manufacturing cost 9.60 8.00 Unit product cost $ 10.00 $ 37,280 Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Year 1 Year 2 Variable costing net operating income (loss) $ 37,280 (100,000) Add fixed manufacturing overhead deferred in inventory 168,960 Deduct fixed manufacturing overhead cost released from inventory $ 37,280 $ 68,960 Absorption costing net operating income (loss) 0 0 0 0 OC (42,240) $ 4,960 Return to question 2. Keter to the absorption costing income statements above. a. Compute the unit product cost in each year under absorption costing. Show how much of this cost is variable and how much is fixed. b. Reconcile the variable costing and absorption costing net operating income figures for each year. 5b. If Lean Production had been used during Year 2 and Year 3, what would the company's net operating income (or loss) have been in each year under absorption costing? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Req 2B Reg 5B If Lean Production had been used during Year 2 and Year 3, what would the company's net operating income (or loss) have been in each year under absorption costing? Year 1 Year 2 Year 3 Net operating income Net operating income Net operating income $ 137,280 $ (21,120) $ 158,400