I need help answering the following.

b)

What is the net operating income (loss) in Year 2 under absorption costing?

Because my answer for this is incorrect, I am unable to answer the following:

3.

Make a note of the absorption costing net operating income (loss) in Year 2.

At the end of Year 1, the companys board of directors set a target for Year 2 of net operating income of $220,000 under absorption costing. If this target is met, a hefty bonus would be paid to the CEO of the company. Keeping everything else the same from part (2) above, change the units produced in Year 2 to 5,200 units.

(a)

Would this change result in a bonus being paid to the CEO?

	Yes
	No

(b)	What is the net operating income (loss) in Year 2 under absorption costing?

The answers I am getting are showing as incorrect, so my formulas must be wrong somewhere. I think it may be my calculation for fixed manufacturing overhead or the cost of goods sold, but I could be wrong. Please Help!

MY FILLED IN DATA

Chapter 6: Applying Excel

Data

Selling price per unit

$378

Manufacturing costs:

Variable per unit produced:

Direct materials

$147

Direct labor

$61

Variable manufacturing overhead

$23

Fixed manufacturing overhead per year

$150,800

Selling and administrative expenses:

Variable per unit sold

$6

Fixed per year

$75,000

Year 1

Year 2

Units in beginning inventory

0

Units produced during the year

2,900

2,600

Units sold during the year

2,700

2,700

Enter a formula into each of the cells marked with a ? below

Review Problem 1: Contrasting Variable and Absorption Costing

Compute the Ending Inventory

Year 1

Year 2

Units in beginning inventory

0

200

Units produced during the year

2,900

2,600

Units sold during the year

2,700

2,700

Units in ending inventory

200

100

Compute the Absorption Costing Unit Product Cost

Year 1

Year 2

Direct materials

$147

$147

Direct labor

61

61

Variable manufacturing overhead

23

23

Fixed manufacturing overhead

52

58

Absorption costing unit product cost

$283

$289

Construct the Absorption Costing Income Statement

Year 1

Year 2

Sales

$ 1,020,600

$ 1,020,600

Cost of goods sold

764,100

808,000

Gross margin

256,500

212,600

Selling and administrative expenses

91,200

91,200

Net operating income

$ 165,300

$ 121,400

Compute the Variable Costing Unit Product Cost

Year 1

Year 2

Direct materials

$147

$147

Direct labor

61

61

Variable manufacturing overhead

23

23

Variable costing unit product cost

$231

$231

Construct the Variable Costing Income Statement

Year 1

Year 2

Sales

$ 1,020,600

$ 1,020,600

Variable expenses:

Variable cost of goods sold

$ 623,700

$623,700

Variable selling and administrative expenses

16,200

639,900

16,200

$639,900

Contribution margin

380,700

380,700

Fixed expenses:

Fixed manufacturing overhead

$150,800

$150,800

Fixed selling and administrative expenses

$75,000

$225,800

$75,000

$225,800

Net operating income

$ 154,900

$ 154,900

Original data:

Chapter 6: Applying Excel

Data

Selling price per unit

$50

Manufacturing costs:

Variable per unit produced:

Direct materials

$11

Direct labor

$6

Variable manufacturing overhead

$3

Fixed manufacturing overhead per year

$120,000

Selling and administrative expenses:

Variable per unit sold

$4

Fixed per year

$70,000

Year 1

Year 2

Units in beginning inventory

0

Units produced during the year

10,000

6,000

Units sold during the year

8,000

8,000

Enter a formula into each of the cells marked with a ? below

Review Problem 1: Contrasting Variable and Absorption Costing

Compute the Ending Inventory

Year 1

Year 2

Units in beginning inventory

0

?

Units produced during the year

?

?

Units sold during the year

?

?

Units in ending inventory

?

?

Compute the Absorption Costing Unit Product Cost

Year 1

Year 2

Direct materials

?

?

Direct labor

?

?

Variable manufacturing overhead

?

?

Fixed manufacturing overhead

?

?

Absorption costing unit product cost

?

?

Construct the Absorption Costing Income Statement

Year 1

Year 2

Sales

?

?

Cost of goods sold

?

?

Gross margin

?

?

Selling and administrative expenses

?

?

Net operating income

?

?

Compute the Variable Costing Unit Product Cost

Year 1

Year 2

Direct materials

?

?

Direct labor

?

?

Variable manufacturing overhead

?

?

Variable costing unit product cost

?

?

Construct the Variable Costing Income Statement

Year 1

Year 2

Sales

?

?

Variable expenses:

Variable cost of goods sold

?

?

Variable selling and administrative expenses

?

?

?

?

Contribution margin

?

?

Fixed expenses:

Fixed manufacturing overhead

?

?

Fixed selling and administrative expenses

?

?

?

?

Net operating income

?

?