= Homework: Absorption VS Variable Costing Assignment Question 1, E3-40A (sim.. Part 1 of 7 HW Score: 0%, 0 of 4 points O Points: 0 of 1 Save The annual data that follow pertain to Joe's Pool Stuff, a manufacturer of swimming goggles. (Joe's Pool Stuff had no beginning inventories.) (Click the icon to view the data.) Requirements 1. Prepare both conventional (absorption costing) and contribution margin (variable costing) income statements for Joe's Pool Stuff for the year. 2. Which statement shows the higher operating Income? Why? Reconcile the difference between the two statements. 3 Joe's Pool Stuff's marketing vice-president believes a new sales promotion that costs $190,000 would increase sales to 215.000 goggles. Should the company go ahead with the promotion? Give your reason. Requirement 1. Prepare both conventional (absorption costing) and contribution margin (variable costing) income statements for Joe's Pool Stuff for the year. Begin with the conventional (absorption costing) income statement. (For entries with a zero balance, make sure enter "O" in the appropriate cell.) Data table 43 Joe's Pool Stuff Conventional (Absorption Costing) Income Statement For the Year Ended December 31 ......... 21 6 Sale price..... Variable manufacturing expense per unit... Sales commission expense per unit Fixed manufacturing overhead Fixed operating expenses Number of goggles produced Number of goggles sold 1,935,000 250.000 215.000 195.000 Print Done Operating income