8-32 Straightforward Problem on Absorption versus Variable Costing (LO 8-2, 8-3, 8-4) Skinny Dippers Inc. produces nonfat frozen yogurt. The product is sold in ten-gallon containers, which have the following price and variable costs Sales price. $44 Direct material 17 Direct labor 9 11 Variable overhead Budgeted fixed overhead in 20x1, the company's first year of operations, was $240,000 Actual production was 80,000 ten-gallon containers, of which 76,000 were sold Skinny Dippers Inc. incurred the following selling and administrative expenses. Fixed Variable $160,000 for the year $ 1 per container sold Required: 1. Compute the product cost per container of frozen yogurt under (a) variable costing and (b) absorption costing 2-a. Prepare an operating income statement for 20x1 using absorption costing 2-b. Prepare an operating income statement for 20x1 using variable costing 3. Reconcile the operating income reported under the two methods by listing the two key places where the income statements differ 4. Reconcile the operating income reported under the two methods using the shortcut method