Great Outdoze Company manufactures sleeping bags, which sell for $65.40 each. The variable costs of production are as follows: Direct material Direct labor Variable manufacturing overhead $19.50 9.70 7.20 Budgeted fixed overhead in 20x1 was $187,600 and budgeted production was 28,000 sleeping bags. The year's actual production was 28,000 units, of which 24,900 were sold. Variable selling and administrative costs were $1.70 per unit sold, fixed selling and administrative costs were $20,000. Required: 1. Calculate the product cost per sleeping bag under (a) absorption costing and (b) variable costing. 2-a. Prepare an operating income statement for the year using absorption costing. 2-b. Prepare an operating income statement for the year using variable costing. 3. Reconcile reported operating income under the two methods using the shortcut method