Inc. planned and actually manufactured 210,000 units of its single product in 2022, its first year of operation. Variable manufacturing cost was $25 per unit produced. Variable operating (non-manufacturing) cost was $10 per unit sold. Planned and actual fixed manufacturing costs were $420,000. Planned and actual fixed operating (non-manufacturing) costs totaled

$360,000. Ottawa sold 120,000 units of product at $46 per unit.

Required

1.	Ottawa's 2022 operating income using absorption costing is (a) $2,610,000, (b) $720,000, (c) $540,000, (d) $(1,170,000), or (e) none of these. Show supporting calculations.
2.	Ottawa's 2022 operating income using variable costing is (a) $2,610,000, (b) $720,000, (c) $540,000, (d) $(1,170,000), or (e) none of these. Show supporting calculations.

Question content area bottom

Part 1

Requirement 1.

Ottawa's 2022 operating income using absorption costing is (a) $720,000, (b) $540,000, (c) $2,610,000, (d) $(1,170,000), or (e) none of these. Show supporting calculations. Begin by selecting the labels used in the absorption costing calculation of operating income and enter the supporting calculations. (For amounts with a $0 balance, make sure to enter "0" in the appropriate cell. Use parentheses or a minus sign for an operating loss.)

Absorption costing
	Deduct:
Operating income