Requirement 2:

Change all of the numbers in the data area of your worksheet so that it looks like this:

	A	B	C	D
1	Chapter 6: Applying Excel
2
3	Data
4	Selling price per unit	$353
5	Manufacturing costs:
6	Variable per unit produced:
7	Direct materials	$137
8	Direct labor	$51
9	Variable manufacturing overhead	$22
10	Fixed manufacturing overhead per year	$127,600
11	Selling and administrative expenses:
12	Variable per unit sold	$5
13	Fixed per year	$76,000
14
15		Year 1	Year 2
16	Units in beginning inventory	0
17	Units produced during the year	2,900	2,200
18	Units sold during the year	2,400	2,400
19

If your formulas are correct, you should get the correct answers to the following questions.

(a)	What is the net operating income (loss) in Year 1 under absorption costing? (Input the amount as a positive value. Omit the "$" sign in your response.)

(Click to select)Net operating incomeNet operating loss

$

(b)	What is the net operating income (loss) in Year 2 under absorption costing? (Input the amount as a positive value. Omit the "$" sign in your response.)

(Click to select)Net operating lossNet operating income

$

(c)	What is the net operating income (loss) in Year 1 under variable costing? (Input the amount as positive value. Omit the "$" sign in your response.)

(Click to select)Net operating lossNet operating income

$

(d)	What is the net operating income (loss) in Year 2 under variable costing? (Input the amount as a positive value. Omit the "$" sign in your response.)

(Click to select)Net operating lossNet operating income

$

(e)

The net operating income (loss) under absorption costing is less than the net operating income (loss) under variable costing in Year 2 because (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.):

	Units were left over from the previous year.
	The cost of goods sold is always less under variable costing than under absorption costing.
	Sales exceeded production so some of the fixed manufacturing overhead of the period was released from inventories under absorption costing.

Requirement 3:

Make a note of the absorption costing net operating income (loss) in Year 2.

At the end of Year 1, the company