Homework: Homework Chapter 2 Question 5, P2-47 (similar to) Part 1 of 4 HW Score: 33.33%, 6.67 of 20 points O Points: 0 of 3 0 Save Jason Hickey, the new plant manager of Old World Manufacturing Plant Number 7, has just reviewed a draft of his year-end financial statements. Hickey receives a year-end bonus of 9.5% of the plant's operating income before tax. The year-end income statement provided by the plant's controller was disappointing to say the least. After reviewing the numbers, Hickey demanded that his controller go back and work the numbers" again. Hickey insisted that if he didn't see a better operating income number the next time around he would be forced to look for a new controller. i (Click the icon to view additional data.) Read the requirements Requirement 1. Show numerically how operating income would improve by S960,000 just by classifying the preceding costs as product costs instead of period expenses. Begin by determining the formula to compute how the controller was able to improve operating income, then enter the appropriate amounts and compute the increase in operating income Warehousing costs as period costs Warehousing costs as product costs - Increase in operating Income More info - X Old World Manufacturing classifies all costs directly related to the manufacturing of its product as product costs. These costs are inventoried and later expensed as costs of goods sold when the product is sold. All other expenses, including finished goods warehousing costs of $3,480,000, are cassified period expenses. Hickey had suggested that warehousing costs be included as product costs because they are "definitely related to our product." The company produced 290,000 units during the period and sold 210,000 units As the controller reworked the numbers he discovered that if he included warehousing costs as product costs, he could improve operating income by $960,000. He was also sure these new numbers would make Hickey happy Print Done Help me solve this Etext pages Get more help