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 $66.70 each. The variable costs of production are as follows: Direct material Direct labor Variable manufacturing overhead $19.70 9.70 6.40 Budgeted fixed overhead in 20x1 was $149,100 and budgeted production was 21,000 sleeping bags. The year's actual production was 21,000 units, of which 18,300 were sold. Variable selling and administrative costs were $1.50 per unit sold; fixed selling and administrative costs were $25,000 Required: 1. Calculate the product cost per sleeping bag under (a) absorption costing and (b) variable costing. 2-a. Prepare operating income statements for the year using absorption costing 2-b. Prepare operating income statements for the year using variable costing. 3. Reconcile reported operating income under the two methods using the shortcut method