PR $8-35($Algo$)$ Variable$-$Costing and Absorption$-$Costing Income Statements $($LO $8-2,8-3,8-4,8-6)$

Great Outdoze Company manufactures sleeping bags, which sell for $$66\mathrm{.}50$ each. The variable costs of production are as follows:

Direct material

Direct labor

Variable manufacturing overhead

$$18\mathrm{.}60$

$10\mathrm{.}50$

$7\mathrm{.}90$

Budgeted fixed overhead in $201$ was $$192,500$ and budgeted production was $25,000$ sleeping bags. The year's actual production was $25,000$ units, of which $21,500$ were sold. Variable selling and administrative costs were $$1\mathrm{.}30$ per unit sold; fixed selling and administrative costs were $$24,000.$

Required:

Calculate the product cost per sleeping bag under $($a$)$ absorption costing and $($b$)$ variable costing.

$2-$a$.$ Prepare an operating income statement for the year using absorption costing.

$2-$b$.$ Prepare an operating income statement for the year using variable costing.

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

Complete this question by entering your answers in the tabs below.

Req $2$B

Req $3$

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

Note: Round your predetermined fixed overhead rate to $2$ decimal places.

$\backslash$table$[[$Change in inventory $($in units$),,$Predetermined fixed overhead rate,$\{$fe$3142868-$d$1$d$9-4$e$50-$bb$1$a$-6$e$80$cbc$21$c$4$a$\}$

$\backslash$table$[[$Absorption$-$costing income minus$],[$variable$-$costing income$]],],[$unit increase,$,,=,]]$