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operations, the compary incurred specifically identifiable product costs (materiais, labor, and overhead) amounting to $53,300. CMC also incurred $73,800 of engineering design and planning costs. There was a debate regarding how the design and planning costs should be classified. Advocates of Option 1 believe that the costs should be classified as general, seling, and administrative costs Advocates of Option 2 believe it is more appropriate to classify the design and planning costs as product costs. During the year, CMC made 4,100 units of product and sold 3,200 units at a price of $39,00 each. All transactions were cash transactions Required a-1. Prepare an income statement and balance sheet under option 1 . a-2. Prepare an income statement and balance sheet under option 2 . b. Identify the option that results in financial statements that are more likely to leave a favorable impression on investors and creditors. c. Assume that CMC provides an incentive bonus to the company president equal to 12 percent of net income: Compute the amount of the bonus under each of the two options. Identify the option that provides the president with the higher bonus. d. Assume a 35 percent income tax rate Determine the amount of income tax expense under each of the two options. Identify the option that minimizes the amount of the company's income tax expense. Complete this question by entering your answer in the tabs below. Prepare a balance sheet for Option 1. During its fist year of operations. Connor Company paid. 545,160 tor direct materials and 519.400 in wages for production workers Lease paytnents and utilies on the production faciuties amounted to $9,400. General, selling, and admintrative expenses were $9.400. The company produced 6.400 units and sold 5,400 units for $16.40 a uni. The average cost to pioduce one unit is which of the following amounts? Mistiple Choice 51287 5992 540 $1351