A B C $1$ Chapter $6$: Applying Excel $23$ Data $4$ Selling price per unit $ $3665$ Manufacturing costs: $6$ Variable per unit produced: $7$ Direct materials $ $1408$ Direct labor $ $749$ Variable manufacturing overhead $ $2510$ Fixed manufacturing overhead per year $ $133,40011$ Selling and administrative expenses: $12$ Variable per unit sold $ $313$ Fixed per year $ $58,0001415$ Year $1$ Year $216$ Units in beginning inventory $017$ Units produced during the year $2,9002,30018$ Units sold during the year $2,5002,500$

$($a$)$ What is the net operating income $($loss$)$ in Year $1$ under absorption costing?

$($b$)$ What is the net operating income $($loss$)$ in Year $2$ under absorption costing?

$($c$)$ What is the net operating income $($loss$)$ in Year $1$ under variable costing?

d$)$ What is the net operating income $($loss$)$ in Year $2$ under variable costing?

t the end of Year $1,$ the company$$s board of directors set a target for Year $2$ net operating income of $$170,000$ under absorption costing. If this target is met, a large bonus would be paid to the CEO of the company. Keeping everything else the same from part $(2)$ above, change the units produced in Year $2$ to $4,600$ units.

$($a$)$ Would this change result in a bonus being paid to the CEO?

multiple choice $1$

Yes

No

$($b$)$ What is the net operating income $($loss$)$ in Year $2$ under absorption costing?