TEST 3-ACC209 Managerial Accounting (39) (Summer 2022) Name/Student Number: (MUST SHOW WORK TO GET PART MARKS) 1) The Skate Company manufactures skateboards. Skate boarding is a very popular sport in the summer. In 2021, the first year of operations, The Skate Company produced 20,000 units and sold 18,000 units. The selling price for one skateboard is $140, variable-manufacturing costs were $50 per unit, variable selling expenses were $10 per unit, fixed manufacturing costs were $500,000, and fixed selling & administrative expenses were $200,000. Calculate the net income under variable costing and absorption costing for the year and reconcile the differences in income from operations under the two costing approaches. 2) The Yard Corporation is a new company located in Toronto, Ontario. The company is in the process of setting a selling price for a new product it has just designed. The company investment to establish the business and product was $2 Million and the owners expect a 20% return on their investment. The following data relate to this product for a budgeted volume of 50,000 units: Per Unit Direct materials Total $25 Direct labour 35 Variable manufacturing overhead 12 Fixed manufacturing overhead $750,000 Variable selling and administrative expenses 10 Fixed selling and administrative expenses 200,000 Calculate each of the following: a) Desired ROI (return on investment) per unit. b) The mark-up amount per unit when using the variable costing approach. c) The mark-up amount per unit when using the absorption costing approach. d) Explain why it is important to include the ROI in the selling price.