Use the following information to answer questions 42-44 [The following information applies to the questions displayed below] Lehighton Chalk Company manufactures sidewalk chalk, which it sells online by the box at $24 per unit. Lehighton uses an actual costing system, which means that the actual costs of direct material, direct labor, and manufacturing overhead are entered into work-in-process inventory. The actual application rate for manufacturing overhead is computed each year, actual manufacturing overhead is divided by actual production (in units) to compute the application rate. Information for Lehighton's first two years of operation is as follows: Sales (in units) Production (in units) Production costs: Variable manufacturing costs Fixed manufacturing overhead Selling and administrative costs: Variable Fixed Year 1 Year 2 2,400 2,400 2,800 2,000 $13,440 $ 9,600 16,240 16,240 9,600 9,600 8,600 8,600 Selected Information from Lehighton's year-end balance sheets for its first two years of operation is as follows LEHIGHTON CHALK COMPANY Selected Balance Sheet Information Based on absorption costing Finished-goods inventory Retained earnings Based on variable costing Finished-goods inventory Retained earnings End of Year 1 $4,240 8,460 End of Year 2 $ 15,080 End of Year 2 $ 15,080 End of Year 1 $1,920 6,140 Case 8-43 Analysis of Differences in Absorption-Costing and Variable-Costing Income Statements; Continuation of Preceding Case (LO 8-1, 8-6) Required: 1. Reconcile Lehighton's operating income reported under absorption and variable costing, during each year, by comparing the following two amounts on each income statement Required: 1. Reconcile Lehighton's operating Income reported under absorption and variable costing, during each year, by comparing the following two amounts on each Income statement Cost of goods sold Fixed cost (expensed as a period expense) 2. What was Lehighton's total operating income across both years under absorption costing and under variable costing? 3. What was the total sales revenue across both years under absorption costing and under variable costing? 4. What was the total of all costs expensed on the operating Income statements across both years under absorption costing and unde variable costing? 5. Subtract the total costs expensed across both years (requirement 4) from the total sales revenue across both years (requirement 3): (a) under absorption costing and (b) under variable costing. 6. Considering the results obtained in requirements 1-5 above, evaluate the following statements. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Reconcile Lehighton's operating income reported under absorption and variable costing, during each year, by comparing the following two amounts on each income statement: Cost of goods sold Fixed cost (expensed as a period expense) Subtotal Total Show less & Year 1 Year 2 $ 0 $ Difference in operating income $ 0 S Case 8-43 Analysis of Differences in Absorption-Costing and Variable-Costing Income Statements; Continuation of Preceding Case (LO 8-1, 8-6) Required: 1. Reconcile Lehighton's operating Income reported under absorption and variable costing, during each year, by comparing the following two amounts on each income statement. Cost of goods sold Fixed cost (expensed as a period expense) 2. What was Lehighton's total operating income across both years under absorption costing and under variable costing? 3. What was the total sales revenue across both years under absorption costing and under variable costing? 4. What was the total of all costs expensed on the operating income statements across both years under absorption costing and under variable costing? 5. Subtract the total costs expensed across both years (requirement 4) from the total sales revenue across both years (requirement 3): (a) under absorption costing and (b) under variable costing. 6. Considering the results obtained in requirements 1-5 above, evaluate the following statements. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 What was Lehighton's total operating income across both fears under absorption costing and under variable costing? Absorption costing Variable costing Total Operating Income 2. What was Lehighton's total operating income across both years under absorption costing and under variable costing? 3. What was the total sales revenue across both years under absorption costing and under variable costing? 4. What was the total of all costs expensed on the operating income statements across both years under absorption costing and under variable costing? 5. Subtract the total costs expensed across both years (requirement 4) from the total sales revenue across both years (requirement 3): (a) under absorption costing and (b) under variable costing 6. Considering the results obtained in requirements 1-5 above, evaluate the following statements. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 5 Rered 3 Required 4 Required 6 What was the total sales revenue across both years under absorption costing and under variable costing? Absorption costing Variable costing A Total Sales Revenue 2. What was Lehighton's total operating Income across both years under absorption costing and under variable costing? 3. What was the total sales revenue across both years under absorption costing and under variable costing? 4. What was the total of all costs expensed on the operating income statements across both years under absorption costing and unde variable costing? 5. Subtract the total costs expensed across both years (requirement 4) from the total sales revenue across both years (requirement 3): (a) under absorption costing and (b) under variable costing. 6. Considering the results obtained in requirements 1-5 above, evaluate the following statements. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required Required 5 Required 6 What was the total of all costs expensed on the operating income statements across both years under absorption costing and under variable costing? Absorption costing Vanable costing Costs Expensed < Required 3 Required 5 > Required 1 Required 2 Required 31 Required 4 Required Required 6 Subtract the total costs expensed across both years (requirement 4) from the total sales revenue across both years" (requirement 3): (a) under absorption costing and (b) under variable costing. Amount Absorption costing Variable costing