Munoz Company incurred manufacturing overhead cost for the year as follows. Direct materials Direct labor Manufacturing overhead. Variable Fixed ($19.40/unit for 1,100 units) Variable selling and administrative expenses Fixed selling and administrative expenses $ 40.00/unit $ 26.20/unit $ 12.00/unit $21,340 $ 3,660 $14,200 The company produced 1,100 units and sold 600 of them at $180.30 per unit. Assume that the production manager is paid a 1 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? Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Required C Prepare an income statement using absorption costing. MUNOZ COMPANY Income Statement (Absorption Costing) Revenues S 108,180 Cost of goods Sold Direct materials 45,840x Direct labor 32,520 x Manufacturing overhead 12,360 Manufacturing overhead 22,080 x 112,800 Gross margin IS (4,620) Selling and administrative expenses 8,400 Selling and administrative expenses 14,300 (27,320) < Required A Required B > Required A Required B Required C Prepare an income statement using variable costing. Revenues MUNOZ COMPANY Income Statement (Variable Costing) Variable costs Direct materials Direct labor Variable manufacturing overhead $ 45,840 x 32,520 x 12,360 Variable selling and administrative expenses 8,400 x Supplies expense Contribution margin Fixed manufacturing overhead Fixed manufacturing overhead Fixed selling and administrative expenses Net income $ 108,180 99,120 $ 9,060 31,280 14,300 45.580 (82,100) < Required A Required C > Required A Required B Required C Determine the manager's bonus using each approach. Which approach would you recommend for internal reporting? your intermediate calculations and final answers to the nearest whole dollar amount.) Absorption costing $ 816 Variable costing $ Which approach is recommended? 724 Variable costing < Required B Required C >