The annual data that follows pertain to Goggles Only, a manufacturer of swimming goggles $($the company had no beginning inventory$)$:

View the data.

Read the requirements.

Requirement $1.$ Prepare both conventional $($absorption costing$)$ and contribution margin $($variable costing$)$ income statements for Goggles Only for the year. Begin with the

conventional $($absorption costing$)$ income statement.

Goggles Only

Income Statement $($Absorption Costing$)$

For the Year Ended December $31$

Less:

Less:

Operating expenses

The annual data that follows pertain to Goggles Only, a manufacturer of swimming goggles $($the company had no beginning inventory$)$:

View the data.

Read the requirements.

Data

Requirements

Prepare both conventional $($absorption costing$)$ and contribution

margin $($variable costing$)$ income statements for Goggles Only for the year.

Which statement shows the higher operating income? Why?

The company marketing vice president believes a new sales promotion that

costs $$165,000$ would increase sales to $210,000$ goggles. Should the

company go ahead with the promotion? Give your reason.