Frazer produces jet bridges for many domestic and international airports. Cost information for Frazer's jet bridges is as follows: (Click the icon to view the cost information.) Additional information for the first three quarters of 2020 for Frazer are shown below: (Click the icon to view the additional information for the first three quarters.) Frazer's controller, Mel, 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 Data table Data table Variable costs per jet bridge: 1st Quarter 2nd Quarter 3rd Quarter Materials $ 5,700 Budgeted production 70 75 72 Labor $ 3,400 Actual production 70 75 72 Manufacturing Overhead $ 6,800 Sales 66 69 63 Selling $ 1,800 Sales price: $36,000 per jet bridge General and administrative $ 600 Fixed selling costs by quarter 240,000 240,000 220,000 Fixed costs for the first 3 quarters of 2020 Foxed G&A costs by quarter 375,000 240,000 240,000 Manufacturing Overhead $ 922,250 allocated based on budgeted production i Selling $ 700,000 General and administrative $ 855,000 Print Done Print Done 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.) Absorption Costing: Revenues Cost of goods available for sale Net income (loss) Quarter 1 Quarter 2 Quarter 3 Requirement 2. Prepare a variable costing income statement. (Complete all input fields. Enter a O 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 Net income (loss) www.sach norfing method 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 inventory. As a result, based on our scenario here where ending inventory is net income, followed by the costing method, with the costing method, with the between the three quarters, the costing method absorbing the least amount of costs into costing method results in the highest amount of 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 Frazer is currently using to calculate the bonus for the production manager? Why? costing method to calculate the bonus for the production manager because inventory is each quarter costing will increase net income by the amount of costs absorbed into inventory, thus providing the managers with a higher bonus. Requirement 6. If Q4 sales were 75 and 04 actual and budgeted production was 60, what difference would you expect in Q4 income between absorption costing and variable costing? Why? Based on the information provided, Frazer is likely using the with no credible reason. Using If Q4 sales are 75 and Q4 production is 60, ending inventory would At a fixed manufacturing cost per unit of calculated with absorption costing to be units we would expect net income than variable costing