Variable and Absorption Costing using Excel's SUM and Basic Math Functions Addison, Inc. makes a single product, an indoor fireplace, and has provided data from last year of operations. The Controller has asked you to compare income statements if the company used the varlable costing approach vs. the absorptlon costing report. Use the information included In the Excel Simulation and the Excel functions described below to complete the task. - Cell Reference: Allows you to refer to data from another cell in the worksheet. From the Excel Simulation below, If in a blank cell, "=B3" was entered, the formula would output the result from cell B3, or 420 in this example. - Baslc Math functions: Allows you to use the basic math symbols to perform mathematical functions. You can use the following keys: + (plus sign to add), - (minus sign to subtract), "(asterisk sign to multply), and / (forward slash to divide). From the Excel Simulation below, if in a blank cell "mB15+B16" was entered, the formula would add the values from those celis and output the result, or 9,500 in this example. If using the other math symbols the result would output an appropriate answer for its function. - SUM functioni Allows you to refer to multiple cells and adds all the values. You can add individual cell references or ranges to utilize this function. From the Excel Simulation below, if in a blank cell "=SUM(B6,B7,B8)" was entered, the formula would output the result of adding those three separate cells, or 215 in this example. Sim larly, If in a blank cell " - SUM(B6:88)" was entered, the formula would output the same result of adding those cells, except they are expressed as a range in the formula, and the result would be 215 in this example. 1 Addison, Inc, makes a single product, an indoor fireplace. Data for last year is as follows: 3 Selling price per fireplace $420 4 Manufacturing costs: 5 Variable per unit produced: 6 Direct materials 10 Selling and administrative expenses: 11 Variable per unit sold 12 Fixed per year $45 $190,000 14 Units in beginning inventory 15 Units produced during the year 16 Units sold during the year 17 18 Use the data to answer the following. 20 1. Assume the company uses variable costing: 22 Compute the unit product cost for one fireplace 24 Prepare a contribution margin income statement for the year Sales Variable expenses: Variable cost of goods sold Variable selling and administrative expenses Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative expenses Net operating income Compute the number of fireplaces required to breakeven 2. Assume the company uses absorption costing: Compute the unit product cost for one fireplace Prepare an income statement for the year Sales: 45 Cost of goods sold 46 Gross margin 47 Selling and administrative expenses 48 Net operating income