(25 points) variable costing vs absorption costing. Kineret Inc. provided the following summarized data for 2018 and 2019. Kineret manufactures a single product and started operation on January 1, 2018. (In all parts of this question show your calculations.) 2019 2018 Units Produced 20,000 22,400 Units Sold 22,400 20,000 Total fixed manufacturing overhead Variable manufacturing overhead per unit produced Total fixed operating expense Variable operating expense per unit sold Direct materials per unit produced Direct labor per unit produced Selling price per unit 963,200 21 540,000 8 10 12 180 1) The production manager was not happy to see 2019 inventory going down and wanted to increase production during 2019. The CFO, on the other hand, argued that based on current demand the company would not be able to sell more than 22,400 units in 2019, therefore increasing production will increase costs but not revenues, and would decrease the net income reported to investors (GAAP net income). The production manager, a NYU Stern graduate, told the CFO that GAAP net income would actually increase and that he did not understand accounting and should seek a career in dancing (yes, he is a little blunt...). Do you agree with CFO or the production manager? Support your answer. m) Assume that you must decide quickly whether to accept a special one-time order for 1000 units at $60 per unit. Which income statement presents the most relevant data? Determine the apparent profit or loss on the special order based this information. Mark Ture or False each of the following statements regarding the advantages and disadvantages of absorption vs. variable costing: n) Variable costing is less consistent with the matching principle of accounting o) Absorption costing is required under GAAP. p) Variable costing is better suited for decision making. a) Under variable costing income can be increased by increasing production costs