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Absorption versus variable costing. Grunewald Company manufactures a professional grade vacuum cleaner and began operations in 2011. For 2011. Grunewald budgeted a produce and sell 200,000 units. The company had no price, spending, or efficiency variances, and writes off production-volume variance to cost of goods sold. Actual data for 2011 are given as follows: 1. 2. 3. 4. Prepare a 2011 income statement for Grunewald Company using variable costing. Prepare a 2011 income statement for Grunewald Company using absorption costing. Explain the difference in operating incomes obtained in requirement 1 and requirement 2. Grunewald's management is considering implementing a bonus for the supervisors based on gross margin under absorption costing. What incentives will this create for the supervisors? What modifications could Grunewald management make to improve such a plan? Explain briefly