Hello, anyone have solutions for problem 8-43, questions 2,3,4?

For this Case Study complete the three requirements below:

A supplier of aircraft parts to an aircraft manufacturer has noticed an increase in inventory. As a result of this, will absorption costing or variable costing income be greater for the supplier? Explain why?

You are a management analyst for XYZ aircraft manufacturing company. Your company is considering either to use absorption costing or variable costing for internal financial analysis. Which method would you recommend and why would you recommend it?

Refer to Case 8-43 at the end of Chapter 8.

Build or use an existing Excel Spreadsheet and complete requirements 2, 3, and 4.

Comment on the results obtained from requirements 2, 3, and 4.

The spreadsheet must accompany the submission.

case 8-43 Reconciliation of reported operating income:

Year 1	Absorption Costing Operating Income Statement			Variable Costing Operating Income Statement
Cost of goods sold ..........................................	$26,250			$8,750
Fixed cost (expensed as period expense)......	10,000	a		31,000	b
Total ..................................................................	$36,250			$39,750
Difference (cost greater on variable- costing operating income statement) ..........	$3,500
Reported operating income ............................	$13,750			$10,250
Difference in reported operating income (income greater on absorption-costing operating income statement) ..........................	$3,500

^aFixed selling and administrative cost only

^bBoth fixed selling and administrative cost and fixed manufacturing overhead

Year 2	Absorption Costing Operating Income Statement			Variable Costing Operating Income Statement
Cost of goods sold ..........................................	$33,250			$ 8,750
Fixed cost (expensed as period expense)......	10,000			31,000
Total ..................................................................	$43,250			$39,750
Difference (cost greater on absorption- costing operating income statement) ............	$3,500
Reported operating income ............................	$ 6,750			$10,250
Difference in reported operating income (income greater on variable-costing operating income statement) ..........................	$3,500

case 8-43 (continued)

1. Total operating income across both years:

a. Absorption costing: $13,750 + $6,750 = $20,500

b. Variable costing: $10,250 + $10,250 = $20,500