Required information Chapter 6: Applying Excel (Algo) The Chapter 6 Form worksheet is to be used to create your own worksheet version of the Review Problem in the text. Chapter 6: Applying Excel: Excel Worksheet (Algo) (Part 1 of 2) Downlead the Applying Excel form and enter formulas in all cells that contain question marks. For example, in cell 826 enter the formula =817. After entering formulas in all of the cells that contained question marks, verify that the dollar amounts match the numbers in Review Problem 1. The LIFO inventory flow assumption is used throughout the problem. Check your worksheet by changing the units sold in the Data to 6,000 for Year 2 . The cost of goods sold under absorption costing for Year 2 should now be $240,000. If it isn't, check cell C41. The formula in this cell should be =IF(C26CC36+(C27C26)+B36,C27+C36).) If your worksheet is operating properly, the net operating income under both absorption costing and variable costing should be $(34,000) for Year 2 . That is, the loss in Year 2 is $34,000 under both methods. If you do not get these answers, find the errors in your worksheet and correct them. Assume that the units produced in year 2 were sold first. Save your completed Applying Excel form to your computer and then upload it here by clicking "Browse." Next, click "Save." You will use this worksheet to answer the questions in Part 2. Enter a formula into each of the cells marked with a ? below Review Problem 1: Contrasting Variable and Absorption Costing Compute the Ending Inventory 29 30 Compute the Absorption Costing Unit Product Cost 31 Year 1 Year 2 Chapter 6 Form + Ready K3 Accessiblity; Unavailable Home Insert Draw Page Layout Formulas Data Review View Automate Q Tell me 30 Compute the Absorption Costing Unit Product Cost 37 38 Construct the Absorption Costing Income Statement 45 46 Compute the Variable Costing Unit Product Cost \begin{tabular}{|l|l|} 47 & \\ 48 & Direct materials \\ 49 & Direct labor \\ 50 & Variable manufacturing overhead \\ 51 & Variable costing unit product cost \\ 52 & \\ 53 & Construct the Variable Costing Income Statement \\ \hline 44 & \end{tabular} Year 1 Year 2 54 Year 1 Year 2 Sales Variable expenses: \begin{tabular}{|l|l|l|l|l|} \hline 56 & Variable expenses: & ? & ? \\ \hline 57 & Variable cost of goods sold & ? & ? & ? \\ \hline 58 & Variable selling and administrative expenses & ? & ? \\ \hline \end{tabular} co. Onntrik, Cian mamin Chapter 6 Form + \begin{tabular}{|l|l} 54 & \\ 55 & Sales \\ 56 & Variable expenses: \\ 57 & Variable cost of goods \\ \hline \end{tabular} \begin{tabular}{c|c} Year 1 & Year 2 \\ \hline \end{tabular} 58 Variable cost of goodling and administrative expenses 59 Contribution margin 60 Fixed expenses: 61 Fixed manufacturing overhead 62 Fixed selling and administrative expenses 63 Net operating income 64 65 66 67 68 69 70 71 73 74 75 76 77 77 78 requirea intormation Chapter 6: Applying Excel (Algo) The Chapter 6 Form worksheet is to be used to create your own worksheet version of the Review Problem in the text. 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: If your formulas are correct, you should get the correct answers to the following questions. (a) What is the net operating income (loss) in Year 1 under absorption costing? (Loss amounts should be indicated with a minus sign.) (b) What is the net operating income (loss) in Year 2 under absorption costing? (Loss amounts should be indicated with a minus sign.) (c) What is the net operating income (loss) in Year 1 under variable costing? (Loss amounts should be indicated with a minus sign.) (d) What is the net operating income (loss) in Year 2 under variable costing? (Loss amounts should be indicated with a minus sign.) (e) The net operating income (loss) under absorption costing is less than the net operating income (loss) under variable costing in Year 2 because: (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Units were left over from the previous year The cost of goods sold is always less under varioble costing than under absorption costing. Sales exceeded production so some of the fixed manufacturing overhead of the period was released from inventories under absorption costing 3. 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 $40,000 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 3,800 units. (a) Would this change result in a bonus being paid to the CEO? Yes No (a) Would this change result in a bonus being paid to the CEO? 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 (c) Would this doubling of production in Year 2 be in the best interests of the company if sales are expected to continue to be 2,100 units per year? Yes No