Requirement 1. Prepare both conventional (absorption costing) and contribution margin (variable costing) income statements for Goggles 4 U for the year.

Requirement 2. Which statement shows the higher operating income? Why?

Requirement 3. The company marketing vice president believes a new sales promotion that costs $150,000 would increase sales to 240,000 goggles. Should the company go ahead with the promotion? Give your reason.

- X Data Table GA Sales price 47 Variable manufacturing expense per unit .... $ 15 Sales commission expense per unit $ 10 Fixed manufacturing overhead $ 2,400,000 Fixed operating expenses 230,000 Number of goggles produced 240,000 Number of goggles sold 228,000 Print Done