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 complete but not entirely correct. 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 Cost of goods Sold Direct materials Direct labor Manufacturing overhead Manufacturing overhead Gross margin Selling and administrative expenses Net income $ 108,180 $ 24,000 15,720 7,200 11,640 x 58,560 $ 49,620 17,860 < Required A Required A Required B Required C $ 31,760 Required B > Prepare an income statement using variable costing. MUNOZ COMPANY Income Statement (Variable Costing) Revenues Variable costs Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expenses Contribution margin Fixed manufacturing overhead Fixed manufacturing overhead Fixed selling and administrative expenses Net income $ 24,000 15,720 7,200 3,660 1000 $ 108,180 50,580 $ 57,600 21,340 14,200 35,540 $ (13,480) < Required A Required C >