Question 1 (2 points) Which of the following is true regarding the absorption costing method of calculating income? O A) Absorption costing and variable costing will produce the same net income if all of the units produced are sold. O B) Absorption costing treats the fixed overhead allocated to units produced as a period cost. U C) Absorption costing will produce a smaller net income than variable costing if the number of units produced is greater than the number of units sold. The number of units sold determines the amount of fixed overhead allocated to each unit. Question 2 (8 points) Coyote Company manufactures a very popular product called the Roadrunner. Information in 2019's total production of 2000 Question 2 (8 points) Coyote Company manufactures a very popular product called the Roadrunner. Information on 2019's total production of 2,000 Roadrunners is as follows: Direct materials Direct labor Variable overhead Fixed overhead Total manufacturing costs $318,000 88,000 62,000 94.000 $562.000 Coyote also incurred variable selling and administrative costs of $18 per unit sold and fixed selling and administrative costs totaling $56,000. During 2019 Coyote sold 1,800 Roadrunners for $400 each. Calculate the following items for Coyote's absorption costing income statement: 1. $122,200 2. $125 80 Coyote Company manufactures a very popular product called the Roadrunner. Information on 2019's total production of 2,000 Roadrunners is as follows: Direct materials $318,000 Direct labor 88,000 Variable overhead 62,000 Fixed overhead 94.000 Total manufacturing $562,000 costs Coyote also incurred variable selling and administrative costs of $18 per unit sold and fixed selling and administrative costs totaling $56,000. During 2019 Coyote sold 1,800 Roadrunners for $400 each. Calculate the following items for Coyote's absorption costing income statement: 1. $122,200 2. $125,800 3. $158,000 4. $205,800 Cost of goods sold per unit 5. $214,200 1. $122,200 2. $125,800 3. $158,000 4. $205,800 Cost of goods sold per unit 5. $214,200 6. $281,000 Total sales 7. $294,200 Operating income 8. $299,000 Gross profit 9. $312,000 Total cost of goods sold 10. $505,800 11. $538,200 12. $562,000 12 $720 000 4. $205,800 Cost of goods sold per unit 5. $214,200 6. $281,000 Total sales 7. $294,200 Operating income 8. $299,000 Gross profit 9. $312,000 Total cost of goods sold 10. $505,800 11. $538,200 12. $562,000 13. $720,000 14. $800,000