The variable manufacturing costs per unit of Cool Ride Motors are as follows: 4(Click the icon to view the variable manufacturing costs per unit.) Cool Ride Motors assembles and sells motor vehicles and uses standard costing. Actual data and variable costing and absorption costing income statements relating to April and May 2017 are as follows: (Click the icon to view the data.) 2(Click the icon to view the variable costing income statements 3(Click the icon to view the absorption costing income statements.) Read the requirements Requirement 1. Prepare income statements for Cool Ride Motors in April and May 2017 under throughput costing. Begin by completing the top portion of the statement, then the bottom portion. (Complete all answer boxes. Enter a "O" for any zero amounts.) April 2017 May 2017 Revenues (1) Direct material cost of goods sold (2) Beginning inventory (3) Direct materials (4) Cost of goods available for sale (5) Deduct ending inventory (6) Total direct material cost of goods sold (7) Throughput margin Operating income Requirement 2. Contrast the results in requirement 1 with the absorption and variable costing income statements presented In April (10) has the lowest operating income, whereas in May (11) has the highest puts greater emphasis on sales as the source of operating income than does either operating income. (12) (13) Requirement 3. Give one motivation for Cool Ride Motors to adopt throughput costing. (14) costing puts a penalty on production without a corresponding sale in the same period. Costs other than direct materials that are variable with respect to production are (15) in the period of incurrence, whereas under variable costing they would be (16) As a result, (17) provides less incentive to produce for inventory than either (18) 1: Data Table April May Unit data: 0 150 Beginning inventory Production 400 350 Sales 250 475 Variable costs: Manufacturing cost per unit produced $ 10,500 $ 10,500 Operating (marketing) cost per unit sold 3,800 3,800 Fixed costs: Manufacturing costs $ 2,200,000 $ 2,200,000 Operating (marketing) costs 625,000 625,000 The selling price per vehicle is $29,000. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 400 units. There are no price, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs. 2: variable costing income statements April 2017 May 2017 Revenues $ 7,250,000 $ 13,775,000 Variable costs: Beginning inventory $ 0 $ 1,575,000 4,200,000 3,675,000 Variable manufacturing costs Cost of goods available for sale 4,200,000 5,250,000 (262,500) (1,575,000) Less: Ending inventory Variable cost of goods sold 4,987,500 2,625,000 950,000 Variable operating costs 1,805,000 Total variable costs 3,575,000 6,792,500 Contribution margin 3,675,000 6,982,500 Fixed costs: Fixed manufacturing costs 2,200,000 2,200,000 Fixed operating costs 625,000 625,000 Total fixed costs 2,825,000 2,825,000 Operating income $ 850,000 $ 4,157,500 3: absorption costing income statements April 2017 May 2017 Revenues $ 7,250,000 $ 13,775,000 Cost of goods sold: Beginning inventory Variable manufacturing costs $ 0 $ 2,400,000 4,200,000 3,675,000 2,200,000 1,925,000 Allocated fixed manufacturing costs Cost of goods available for sale Less: Ending inventory 6,400,000 (2,400,000) 8,000,000 (400,000) 275,000 Adjustment for production-volume variance 0 Cost of goods sold 4,000,000 7,875,000 Gross margin 3,250,000 5,900,000 Operating costs: Variable operating costs 950,000 1,805,000 Fixed operating costs 625,000 625,000 Total operating costs 1,575,000 2,430,000 Operating income $ 1,675,000 $ 3,470,000 4: Data Table April May $ 6,800 $ 6,800 Direct material cost per unit Direct manufacturing labor cost per unit Manufacturing overhead cost per unit 1,300 1,300 2,400 2,400 5: Requirements 1. Prepare income statements for Cool Ride Motors in April and May 2017 under throughput costing. 2. Contrast the results in requirement 1 with the absorption and variable costing income statements presented. 3. Give one motivation for Cool Ride Motors to adopt throughput costing