Chapter $8$: Applying Excel: Exercise $($Algo$)($Part $2$ of $2)$

$2.$ Change all of the numbers in the data area of your worksheet so that it looks like this: $\backslash$begin$\{$tabular$\}\{|$c$|$c$|$c$|$c$|\}$

$\backslash$hline & A & B & C $\backslash \backslash$

$\backslash$hline $1$ & Chapter $8$: Applying Excel & & $\backslash \backslash$

$\backslash$hline $2$ & & & $\backslash \backslash$

$\backslash$hline $3$ & Data & & $\backslash \backslash$

$\backslash$hline $4$ & Selling price per unit & $\backslash$$ $339$ & $\backslash \backslash$

$\backslash$hline $5$ & Manufacturing costs: & & $\backslash \backslash$

$\backslash$hline $6$ & Variable per unit produced: & & $\backslash \backslash$

$\backslash$hline $7$ & Direct materials & $\backslash$$ $114$ & $\backslash \backslash$

$\backslash$hline $8$ & Direct labor & $\backslash$$ $52$ & $\backslash \backslash$

$\backslash$hline $9$ & Variable manufacturing overhead & $\backslash$$ $32$ & $\backslash \backslash$

$\backslash$hline $10$ & Fixed manufacturing overhead per year & $\backslash$$ $189,000$ & $\backslash \backslash$

$\backslash$hline $11$ & Selling and administrative expenses: & & $\backslash \backslash$

$\backslash$hline $12$ & Variable per unit sold & $\backslash$$ $7$ & $\backslash \backslash$

$\backslash$hline $13$ & Fixed per year & $\backslash$$ $81,000$ & $\backslash \backslash$

$\backslash$hline $14$ & & & $\backslash \backslash$

$\backslash$hline $15$ & & Year $1$ & Year $2\backslash \backslash$

$\backslash$hline $16$ & Units in beginning inventory & $0$ & $\backslash \backslash$

$\backslash$hline $17$ & Units produced during the year & $3,500$ & $2,700\backslash \backslash$

$\backslash$hline $18$ & Units sold during the year & $3,000$ & $3,000\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$

Chapter $8$: Applying Excel: Exercise $($Algo$)($Part $2$ of $2)$

Change all of the numbers in the data area of your worksheet so that it looks like this:

If your formulas are correct, you should get the correct answers to the following questions.

$($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?

$($e$)$ The net operating income $($loss$)$ under absorption costing is less than the net operating income $($loss$)$ under variable costing in Year

$2$ because:

Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct

answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark

will be automatically graded as incorrect.

$(2)$ Units were left over from the previous year.

$\{$ The cost of goods sold is always less under variable costing than under absorption costing.

$?$ Sales exceeded production so some of the fixed manufacturing overhead of the period was released from inventories under absorption

costing.

Make a note of the absorption costing net operating income $($loss$)$ in Year $2.$

At the end of Year $1,$ the company's board of directors set a target for Year $2$ net operating income of $$210,000$ 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 $5,400$ units.

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

Yes

No

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

$($c$)$ Would this doubling of production in Year $2$ be in the best interests of the company if sales are expected to continue to be $3,000$

units per year?

Yes

No

$**$ I have attached my answer for part $1($the excel spreadsheet$),$ but this question has multiple parts to it$.$ I would appreciate if you could explain the steps for better understanding on my part