In a job-order costing system, the subsidiary accounts for the Work in Process Inventory account are the: Complete this question by entering your answers in the tabs below. Required A Required B Required C Prepare an income statement using absorption costing. VERNON COMPANY Income Statement (Absorption Costing) $ 235,950 Revenues Cost of goods Sold Direct materials Direct labor Manufacturing overhead $ 52,000 35,100 37,960 125,060 110,890 $ Gross margin Selling and administrative expenses Net income $ 110,890 Vernon Company incurred manufacturing overhead cost for the year as follows. $ 40.00/unit $ 27.00/unit Direct materials Direct labor Manufacturing overhead Variable Fixed ($18.50/unit for 1,800 units) Variable selling and administrative expenses Fixed selling and administrative expenses $ 10.70/unit $33,300 $ 8,320 $14,200 The company produced 1,800 units and sold 1,300 of them at $181.50 per unit. Assume that the production manager is paid a 2 percent bonus based on the company's net income. Required a. Prepare an income statement using absorption costing. b. Prepare an income statement using variable costing. c. Determine the manager's bonus using each approach. Which approach would you recommend for internal reporting