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Management adopted the policy, effective from I January 2011, ol producing only as much product as was needed to fill sales orders. During 2011. sales were the same as for 2010 and were filled entirely from stock at the suit of 2011. prepare income statements with one column for 2010, one column for 2011 and one column for the two years together, using (a) variable costing and (b) absorption costing. What is the breakeven point under (a) variable costing and (b) absorption costing? What stock costs would be carried on the balance sheets at 31 December 2010 and 2011, under each method? Assume that the performance of the top manager of the company is evaluated and warded largely on the basis of reported operating profit. Which cosling method would he manager prefer? Why