Problem 8-35 Variable-Costing and Absorption-Costing Income Statements (LO 8-2, 8-3, 8-4, 8-6) Great Outdoze Company manufactures sleeping bags, which sell for $66.10 each. The variable costs of production are as follows: Direct material Direct labor Variable manufacturing overhead $18.90 10.00 7.70 Budgeted fixed overhead in 20x1 was $163,200 and budgeted production was 24.000 sleeping bags. The year's actual production was 24,000 units, of which 20 200 were sold. Variable selling and administrative costs were $1.50 per unit sold; fixed selling and administrative costs were $28.000. Required: 1. Calculate the product cost per sleeping bag under (a) absorption costing and (b) variable costing. 2-a. Prepare an operating income statement for the year using absorption costing. 2-b. Prepare an operating income statement for the year using variable costing 3. Reconcile reported operating income under the two methods using the shortcut method