Macintosh Inc. produces covers for smartphones. The product is sold as single units, which have the following price and variable costs. Sales price $40 Direct material 7 Direct labor 4 Variable overhead 2 Budgeted fixed overhead in 2019, the companys first year of operations, was $420,000. Actual production was 30,000 units, of which 25,000 were sold. There is no beginning finished goods inventory. Macintosh Inc. incurred the following selling and administrative expenses. Fixed in 2019 $65,000 Variable per unit sold 3 Required:

1. Compute the product cost per container of smartphone cover under (a) variable costing and (b) absorption costing.

2. Prepare operating income statements for 2019 using (a) absorption costing and (b) variable costing.

3. Reconcile the operating income reported under the two methods using the shortcut method.

Q2: What are the qualities of information? Define them with your own example.