Vacuum Magic Company manufacturers a professional grade vacuum cleaner and began operations in 2017. For 2017, Vacuum Magic budgeted to produce and sell 24,000 units. The company had no price, spending, or efficiency variances and writes of production-volume variance to cost of goods sold. Actual data for 2017 are given as follows: (Click the icon to view the actual data for 2017) Read the Bremen - X Data Table Units produced 20,000 15,500 Units sold Selling price $ 450 Variable costs: $ 28 Manufacturing cost per unit produced: Direct materials Direct manufacturing labor Manufacturing overhead Marketing cost per unit sold 21 54 40 Fixed costs: Manufacturina costs $ 1.296.000 -er Print Done -X i Data Table Selling price $ 450 Variable costs: $ 28 21 54 Manufacturing cost per unit produced: Direct materials Direct manufacturing labor Manufacturing overhead Marketing cost per unit sold Fixed costs: Manufacturing costs Administrative costs Marketing costs 40 $ 1,296,000 1,066,000 1,508,600 ber Print Done i Requirements 1. Prepare a 2017 income statement for Vacuum Magic Company using variable costing 2. Prepare a 2017 income statement for Vacuum Magic Company using absorption costing. 3. Explain the differences in operating incomes obtained in requirements 1 and 2. 4. Vacuum Magic's management is considering implementing a bonus for the supervisors based on gross margin under absorption costing. What incentives will this bonus plan create for the supervisors? What modifications could Vacuum Magic management make to improve such a plan? Explain briefly. Print Done