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DA 1 2 . 2 Data analytics can be used to analyze product costs. Shade Inc. began operations two years ago in 2 0 2

DA12.2 Data analytics can be used to analyze product costs.
Shade Inc. began operations two years ago in 2023. It produces 12-foot patio umbrellas that are guaranteed for 10-years, a warranty period that exceeds its competitors. Because of a robust year in 2024, all units were completed and shipped out as of December 31,2024. The production manager is eligible to receive quarterly bonuses based on the company's absorption costing income before taxes. The company has chosen practical capacity to allocate fixed overhead costs. Budgeted production and sales levels, unit selling prices and unit costs of the umbrellas for the upcoming year is provided here.
Unit Total
Practical capacity production 6,400
Unit sales 6,635
Selling price $189.00
Direct materials cost 48.56
Direct labor cost 37.90
Variable manufacturing cost 12.60
Fixed manufacturing costs $211,453
Variable operating expenses 5.37
Fixed operating expenses 72,141
Assume unit costs of inventories have not materially differed over since the company began operations.
Instructions
There are three parts to this problem. Use Excel to perform the following:
a. Prepare budgeted comparative absorption income statements at production levels of 6,000 to 7,000 units in increments of 100 units.
b. Create a combo chart with a clustered column chart that illustrates gross margin and income before taxes over the range of units produced, and a line chart on the secondary axis. Include a descriptive chart title and axes labels in the chart.

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