Herring Manufacturing manufactures a single product that it will sell for $74 per unit. The company is looking to project its operating income for its first two years of operations. Cost information for the single unit of its product is as follows: (Click the icon to view the data.) During its first year of operations, the company plans to manufacture 25,000 units and anticipates selling 16,000 of those units. During the second year of its operations, the company plans to manufacture 25,000 units and anticipates selling 31,000 units (it has units in beginning inventory for the second year from its first year of operations). Read the requiremente More Info Requirement 1. Prepare an absorption costing income statement for (a) the first year of operations and (b) the Herring Manufacturing Income Statement (Absorption Costing) (a) Year 1 (b) Year 2 Sales revenue 2,294,000 1,184,000 960,000 Direct material per unit produced $38 Direct labor cost per unit produced $9 Variable manufacturing overhead (MOH) per unit produced $3 Variable operating expenses per unit sold $2 Fixed manufacturing overhead (MOH) for each year is $250,000, while fixed operating expenses for each year will be $81,000. Less: Cost of goods sold 1,860,000 Gross profit 224,000 434,000 Less: Operating expenses 113,000 143,000 111,000 291,000 Print Done Operating income Requirement 2. Before you prepare the variable costing income statements for Herring, predict the company's operating income using variable costing for both its first year and its second year without preparing the variable costing income statements. Hint: Calculate the variable costing operating income for a given year by taking that year's absorption costing operating income and adding or subtracting the difference in operating income as calculated using the following formula: Difference in operating income = (Change in inventory level in units x Fixed MOH per unit). Begin by calculating the difference in income each year using the formula provided. Choose from any list or enter any number in the input fields and then continue to the next question. ? Begin by calculating the difference in income each year using the formula provided. x More Info - Fixed MOH Difference in Change in inventory level in units Year X per unit = operating income 1 2 Direct material per unit produced $38 Direct labor cost per unit produced $9 Variable manufacturing overhead (MOH) per unit produced $3 Variable operating expenses per unit sold $2 Fixed manufacturing overhead (MOH) for each year is $250,000, while fixed operating expenses for each year will be $81,000. Now predict Herring's operating income under variable costing for both its first year and its second year of opera Operating income under variable costing Year 1 Print Done 2 Requirement 3. Prepare a variable costing income statement for (a) the first year of operations and (b) the second year of operations. Herring Manufacturing Contributian Main Innama Cintamant Nariable roetine Requirement 3. Prepare a variable costing income statement for (a) the first year of operations and (b) the sec More Info Herring Manufacturing Contribution Margin Income Statement (Variable Costing) (a) Year 1 (b) Year 2 Direct material per unit produced $38 Direct labor cost per unit produced $9 Variable manufacturing overhead (MOH) per unit produced $3 Variable operating expenses per unit sold $2 Fixed manufacturing overhead (MOH) for each year is $250,000, while fixed operating expenses for each year will be $81,000. Less: Print Done Less