Santana Rey expects sales of Business Solutions's line of computer workstation furniture to equal 300 workstations (at a sales price of $3,000 each) for 2018. The workstations' manufacturing costs include the following. Direct materials Direct labor Variable overhead Fixed overhead $ 780 per unit $ 310 per unit $ 50 per unit $28,800 per year The selling expenses related to these workstations follow. Variable selling expenses Fixed selling expenses $ 35 per unit $3,100 per year Santana is considering how many workstations to produce in 2018. She is confident that she will be able to sell any workstations in her 2018 ending inventory during 2019. However, Santana does not want to overproduce as she does not have sufficient storage space for many more workstations. Required: 1. Complete the following income statements using absorption costing. Answer is complete but not entirely correct. Cost of goods sold: 780 Direct materials per unit Direct labor per unit Variable overhead per unit Fixed overhead per unit Cost of goods sold per unit Number of workstations sold Total cost of goods sold Production volume 300 320 workstations workstations $ 780 $ 310 310 50 50 28,800 X 364,800 X $ 29,940 $ 365,940 300 320 $ 8,982,000 $ 117,100,800 300 BUSINESS SOLUTIONS Absorption Costing Income Statements Production volume 320 Sales volume - 300 Workstations workstations workstations Sales $ 900.000 $ 960,000 X Cost of goods sold (8,982,000) (117,100,800) Gross margin (8,082,000) (116,140,800) Selling general and administrative expenses 384,400 407,900 Net income (loss) $ (8.466,400) 116.548,700) Under absorption costing, can the difference between production Yes volume and sales volume affect the reported net income (loss)? 2. Complete the following income statements using variable costing. Answer is not complete. 300 BUSINESS SOLUTIONS Variable Costing Income Statements 300 Production volume (units) workstations Sales volume (units) workstations Sales 900,000 Less: Variable costs Direct materials Direct labor Variable overhead (1,140) Variable selling expenses (35) 320 workstations 300 workstations $ 900,000 ololololo (1,140) (35) Total variable costs Contribution margin (1,175) 898,825 (1,175) 898,825 Less: Fixed expenses Fixed overhead costs Fixed selling expenses OOOO (28,800) (3,100) (28,800) (3,100) Total fixed expenses (31,900) 866,925 (31,900) 866,925 Net income (loss) S $ Under variable costing, can a company increase its net income by increasing production