Great Outdoze lCompany manufactures sleeping bags. which sell for $67.00 each. The variable costs of production are as follows: Direct material $18.50 Direct labor 19.39 Variable manufacturing overhead 180 Budgeted fixed overhead in 20x1 was $140,800 and budgeted production was 22,000 sleeping bags. The year's actual production was 22,000 units, of which 18,200 were sold. Variable selling and administrative costs were $1.40 per unit sold; fixed selling and administrative costs were $30000. Required: 1. Calculate the product cost per sleeping bag under {a} absorption costing and {b} variable costing. Z-a. Prepare an operating income statement for the year using absorption costing. 2-b. Prepare an operating income statement forthe year using variable costing. 3. Reconcile reported operating income under the two methods using the shortcut method.