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Chapter $6$: Applying Excel: Exercise $($Algo$)($Part $2$ of $2)$

$2.$ Change all of the numbers in the data area of your worksheet so that it looks like this:

$\backslash$table$[[,$A$,$B$,$C$],[1,$Chapter $6$: Applying Excel,,$],[2],[3,$Data,,$],[4,$Selling price per unit,$382,],[5,$Manufacturing costs:,,$],[6,$Variable per unit produced:,,$],[7,$Direct materials,$151,],[8,$Direct labor,$78,],[9,$Variable manufacturing overhead,$39,],[10,$Fixed manufacturing overhead per year,$$171,600,],[11,$Selling and administrative expenses:,,$],[12,$Variable per unit sold,$$,5,],[13,$Fixed per year,$$85,000,],[14],[15,,$Year $1,$Year $2],[16,$Units in beginning inventory,$0,],[17,$Units produced during the year,$3,300,2,600],[18,$Units sold during the year,$2,800,2,800]]$

net operating income for year $1$ and $2?$ with absorption costing

net operating income for year $1$ and $2$ for variable costing?

Make a note of the absorption costing net operating income $($loss$)$ in Year $2.$

At the end of Year $1,$ the company$$s board of directors set a target for Year $2$ of net operating income of $$120,000$ under absorption costing. If this target is met, a hefty bonus would be paid to the CEO of the company. Keeping everything else the same from part $(2)$ above, change the units produced in Year $2$ to $5,200$ units.

$($a$)$ Would this change result in a bonus being paid to the CEO?

multiple choice $1$

Yes

No

$($b$)$ What is the net operating income $($loss$)$ in Year $2$ under absorption costing? $($Loss amounts should be indicated with a minus sign.$)$

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