Variable and Absorption Costing a$.$ Prepare an income statement based on full absorption costing.

Only use a negative sign with your answer for net income $($loss$),$ if the answer represents a net loss. Otherwise, do not use negative signs with any answers. Round answers to the nearest whole number, when

applicable. b$.$ Prepare an income statement based on variable costing.

Only use a negative sign with your answer for net income $($loss$),$ if the answer represents a net loss. Otherwise, do not use negative signs with any answers. Round answers to the nearest whole number, when

applicable. c$.$ Assume that you must decide quickly whether to accept a special one$-$time order for $1,000$ units for $$15$ per unit.

Which income statement presents the most relevant data!

Determine the apparent profit or loss on the special order based solely on these data.

Use a negative sign with your answer if the special order creates an apparent loss. Round answer to the nearest whole number.

$

d$.$ If the ending inventory is destroyed by fire, which costing approach would you use as a basis for filing an insurance claim for the fire loss? Why?

Select the most appropriate statement.

Absorption costing approach because the cost should include a reasonable portion of fixed manufacturing costs.

OVariable costing approach because the cost should include a reasonable portion of fixed manufacturing costs.

Summarized data for the first year of operations for Gorman Products, Inc., are as follows:

$\backslash$table$[[$Sales $(75,000$ units$),$$$1,500,000],[$Production costs $(80,000$ units$),],[$Direct material,$440,000],[$Direct labor,$360,000],[$Manufacturing overhead:,$272,000],[$Variable$,160,000],[$Fixed$,],[$Operating expenses:,$84,000],[$Variable$,120,000],[$Fixed$,30,000],[$Depreciation on equipment,$9,000],[$Real estate taxes,$14,400],[$Personal property taxes $($inventory & equipment$),15,000],[$Personnel department expenses,$]]$

DROP DOWN CHOICES:

A $(2$nd photo$)$:

$-$ Gross Profit

$-$ operating Expenses

$-$ Variable manufacturing overhead

$-$ manufacturing overhead

$-$ contribution margin

B$(3$rd photot$)$:

$-$ gross profit

$-$ variable manufacturing overhea

$-$ variable operating expense

$-$ contribution margin

C$(4$th photo$)$:

$-$ absorption costing

$-$ variable costing