X Data table Variable costs per jet bridge: Materials $ 5,300 Labor $ 2,800 Manufacturing Overhead $ 5.600 Selling $ 1,800 General and administrative $ 700 Fixed costs for the first 3 quarters of 2020: Manufacturing Overhead $ 928,200 allocated based on budgeted production Selling $ 690,000 General and administrative $ 965,000Data table 1st Quarter 2nd Quarter 3rd Quarter Budgeted production 65 71 68 Actual production 65 71 68 Sales 61 64 58 Sales price: $35,000 per jet bridge Fixed selling costs by quarter 240,000 240,000 210,000 Fixed G&A costs by quarter 405,000 280,000 280,000Virgil produces jet bridges for many domestic and international airports. Cost information for Virgil's jet bridges is as follows: (Click the icon to view the cost information.) Additional information for the first three quarters of 2020 for Virgil are shown below: ED(Click the icon to view the additional information for the first three quarters.) Virgil's controller, Ned, wishes to analyze the difference in the income statements between throughput costing, absorption costing, and variable costing for the first 3 quarters of 2020. Assume no beginning inventory. Read the requirements. Requirement 1. Prepare an absorption costing income statement. (Complete all input fields. Enter a 0 for any zero balance accounts. Use a minus sign or parentheses for a net loss. Abbreviation used: DM = direct materials; SG&A = selling, general and administrative.) Absorption Costing: Quarter 1 Quarter 2 Quarter 3 Revenues Cost of goods sold: Beginning Inventory Variable manufacturing costs Allocated fixed manufacturing costs Cost of goods available for sale Deduct ending inventory Cost of goods sold Gross margin Variable SG&A costs Fixed SG&A costs Net income (loss)Requirement 2. Prepare a variable costing income statement. (Complete all input fields. Enter a 0 for any zero balance accounts. Use a minus sign or parentheses for a net loss.) Variable Costing: Quarter 1 Quarter 2 Quarter 3 Revenues Variable cost of goods sold: Beginning inventory Variable manufacturing costs Cost of goods available for sale Deduct ending inventory Variable cost of goods sold Variable SG&A costs Contribution margin Fixed manufacturing costs Fixed SG&A costs Net income (loss)Requirement 3. Prepare a throughput costing income statement. (Complete all input fields. Enter a 0 for any zero balance accounts. Use a minus sign or parentheses for a net loss.) Throughput Costing: Quarter 1 Quarter 2 Quarter 3 Revenues Direct materials cost of goods sold: Beginning inventory Direct materials Cost of goods available for sale Deduct ending inventory Direct materials cost of goods sold Throughput margin Manufacturing costs (other than DM) Total SG&A costs Net income (loss)Requirement 4. Explain the dierence in the net income under each costing method. The V costing method aborbs the most costs into inventory, followed by the V costing method, with the V costing method absorbing the least amount of costs into inventory. As a result, based on our scenario here where ending inventory is : between the three quarters, the : costing method results in the highest amount of net income, followed by the V costing method, with the V costing method resulting in the lowest amount of net income for each of the three quarters Requirement 5. Based on the information provided, which costing method do you believe Virgil is currently using to calculate the bonus for the production manager? Why? Based on the Information prowded, Virgil is likely using the V costing method to calculate the bonus for the production manager because inventory is V each quarter with no credible reason. Using V costing will increase net income by the amount of V costs absorbed into inventory, thus providing the managers with a higher bonus Requirement 6. lfQ4 sales were 71 and Q4 actual and budgeted production was 54, what difference would you expect in Q4 income between absorption costing and variable costing? Why'} Ir Q4 sales are 71 and Q4 production is 54, ending inventory would by units. At a fixed manufacturing cost per unit of , we would expect net income calculated with absorption costing to be than variable costing