Requirements 1. Prepare both conventional (absorption costing) and contribution margin (variable costing) income statements for Rays for the year. 2. Which statement shows the higher operating income? Why? Reconcile the difference between the two statements 3. Rays' marketing vice-president believes a new sales promotion that costs $200,000 would increase sales to 200,000 goggles. Should the company go ahead with the promotion? Give your reason. Rays Conventional (Absorption Costing) Income Statement For the Year Ended December 31 Sales revence $ 6,475,000 Los Cost of goods sold: Cost of goods manufactured $ 5000000 Ending finished goods inventory Cost of goods sold Gross profit Operating expenses (4.625.000) 1,850,000 (1.175.000) Choose from any list or enter annum ption costing) and contribution marain (variable costina) income statements for Rays for the year. er operating inc elieves a news Data Table X po goggles. Should the co 7. - ion Costing) Ing Ended Decembe 35 15 or ++ Sale price. Variable manufacturing expense per unit Sales commission expense per unit Fixed manufacturing overhead Fixed operating expenses Number of goggles produced Number of goggles sold entory 2,000,000 250,000 200,000 185,000 Print Done nter any nurnhar in the inn. The annual data that follow pertain to Rays, a manura (Click the icon to view the data.) Requirements 1. Prepare both conventional (absorption costing) and contribution margin (variable 2. Which statement shows the higher operating income? Why? Reconcile the differ 3. Rays' marketing vice-president believes a new sales promotion that costs $200, the promotion? Give your reason. Conventional (Absorption Costing) Income Statement For the Year Ended December 31 Sales revenue $ 6,475,000 Less: Cost of goods sold: Cost of goods manufactured $ 5000000 (4,625,000) Beginning finished goods inventory Cost of goods available for sale Cost of goods manufactured Cost of goods sold Ending finished goods inventory Gross profit Less: Cost of goods sold: Operating expenses Operating income Sales revenue 1,850,000 (1.175,000) $ 675,000 the input fields and then click Check Anett