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Encome Statements under Absorption Costing and Variabile Casting The demand for aloe vera hand lotion, one of numerous products manufactured by Smooth Skin Care Products Inc. has dropped sharply because of recent competition from a similar product. The company's chemists are currently completing tests of various new formulas, and it is anticipated that the manufacture of a superior product can be started on December 1. month in the future. No changes will be needed in the present production facilities to manufacture the new product because only the midture of the various materials will be changed. The controller has been asked by the president of the company for advice on whether to continue production during November or to suspend the manufacture of aloe vera hand lotion until December 1. The controller has assembled the following pertinent data Smooth Skin Care Products Inc. Income Statement-Aloe Vera Hand Lotion For the Month Ended October 31 Sales (400,000 units) $32.000.000 Cost of goods sold Gross profit $3.670.000 Selling and administrative 4.270.000 Lors from operations $ 600.000 The production costs and selling and administrati expenses based on production of 400,000 units in October Direct materials Direct labor Variable manufacturing cost Variable selling and administrative s Femaacturing 51 5 000 for et 270.000 for October Fb selling and administrativa enses xt garantated the federal conte Sales November pacted to drop about these 1. Prepare an estimated income statement in absorption costing form for November for aloe vera hand lotion, assuming that production continues during the month Smooth Skin Care Products Inc. Estimated Income Statement-Absorption Costing Aloe Vera Hand Lotion For the Month Ending November 30 Cost of goods sold vera hand lotion, assuming that production continues during the month 2. Prepare an estimated Income statement in variable costing form for November for Smooth Skin Care Products Inc Estimated Income Statement Variable Casting Aloe Vera Hand Lotion For the Month Ending November 30 Variable cost of goods sold: 3. What would be the estimated loss in from operation the albe vera handlotion production ere teme 4. What advice should the controller give to management Production of A.V. lotion should be Temporary suspension of production is continued. The result would be a saving on would not compared with an operating of