W Company incurred manufacturing overhead cost for the year as follows Direct materials $ 39 50 unit Direct labor $ 27 10 unit Manufacturing overhead Variable $ 10 30 unit Fixed ($19 70 unit for 1,100 units) $ 21,670 Variable selling and administrative expenses $ 3,660 Fixed selling and administrative expenses $ 14,200 The company produced 1,100 units and sold 600 of them at $180 60 per unit Assume that the production manager is paid a 1 percent bonus based on the companys net income Required Prepare an income statement using absorption costing Prepare an income statement using variable costing Determine the managers bonus using each approach Which approach would you recommend for internal reporting Required A Required B Required C Prepare an income statement using absorption costing WALTON COMPANY Income Statement (Absorption Costing) Cost of goods Sold Required A Required B Required A Required B Required C Prepare an income statement using variable costing WALTON COMPANY Income Statement (Variable Costing) Variable costs $ 0 Required A Required C Required A Required B Required C Determine the manager's bonus using each approach Which approach would you recommend for internal reporting (Round your intermediate calculations and final answers to the nearest whole dollar amount ) Absorption costing Variable costing Which approach is recommended

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W. Company incurred manufacturing overhead cost for the year as follows. Direct materials $ 39.50 /unit Direct labor $ 27.10 /unit Manufacturing overhead Variable $

W. Company incurred manufacturing overhead cost for the year as follows.


Direct materials	$	39.50	/unit
Direct labor	$	27.10	/unit
Manufacturing overhead
Variable	$	10.30	/unit
Fixed ($19.70/unit for 1,100 units)	$	21,670
Variable selling and administrative expenses	$	3,660
Fixed selling and administrative expenses	$	14,200

The company produced 1,100 units and sold 600 of them at $180.60 per unit. Assume that the production manager is paid a 1 percent bonus based on the companys net income.

Required

Prepare an income statement using absorption costing.
Prepare an income statement using variable costing.
Determine the managers bonus using each approach. Which approach would you recommend for internal reporting?

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Required A Required B Required C Prepare an income statement using absorption costing. WALTON COMPANY Income Statement (Absorption Costing) Cost of goods Sold Required A Required B Required A Required B Required C Prepare an income statement using variable costing. WALTON COMPANY Income Statement (Variable Costing) Variable costs $ 0 Required A Required C > Required A Required B Required C Determine the manager's bonus using each approach. Which approach would you recommend for internal reporting? (Round your intermediate calculations and final answers to the nearest whole dollar amount.) Absorption costing Variable costing Which approach is recommended?