Franklin Company incurred manufacturing overhead cost for the year as follows.

Direct materials

Direct labor

Manufacturing overhead

Variable $ $ $ $ $ $$0/$unit

Fixed $($$$19\mathrm{.}10/$unit for $1,200$ units$)$

Variable selling and administrative expenses

Fixed selling and administrative expenses

$$\frac{38\mathrm{.}80}{u}$nit

$$\frac{27\mathrm{.}20}{u}$nit

$$\frac{10\mathrm{.}80}{u}$nit

$$22,920$

$$5,180$

$$15,600$

The company produced $1,200$ units and sold $700$ of them ai $$181\mathrm{.}60$ per unit. Assume that the production manager is paid a $2$ percent

bonus based on the company's net income.

Required

a$.$ Prepare an income statement using absorption costing.

b$.$ Prepare an income statement using variable costing.

c$.$ Determine the manager's bonus using each approach. Which approach would you recommend for internal reporting?

Complete this question by entering your answers in the tabs below.

Required A

Required $B$

Required C

Prepare an income statement using absorption costing.