Assume that the division is using variable costing. How many units should be scheduled for production during the last quarter of the year? (The basic formula for computing the required production for the quarter is: Required production = Expected sales Desired ending inventory − Beginning inventory.) Show computations and explain your answer. Will the number of units scheduled for production affect the division’s reported income or loss for the year? Explain. Assume that the division is using absorption costing and that the divisional manager is given an annual bonus based on divisional operating income. If Mr. Cavalas wants to maximize his division’s operating income for the year, how many units should be scheduled for production during the last quarter? [See the formula in (1) above.] Explain. Identify the ethical issues involved in the decision Mr. Cavalas must make about the level of production for the last quarter of the year.