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Christian Laettner, the controller of Pistons Paint Supply Company, has been exploring a variety of internal accounting systems. Christian hopes to get the input of

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Christian Laettner, the controller of Pistons Paint Supply Company, has been exploring a variety of internal accounting systems. Christian hopes to get the input of Pistons' board of directors in choosing one. To prepare for his presentation to the board, Christian applies four different cost accounting methods to the firm's operating data for 2020. The four methods are actual absorption costing, normal absorption costing, standard absorption costing, and standard variable costing. With the help of a junior accountant, Christian prepares the following alternative income statements: D Sales Revenue $ 900.000 $375,000 B $ 900.000 $ 250,000 $ 900,000 $ 420,000 $ 900,000 $ 395,000 Cost of Goods Sold (+) Variances: Direct Materials Direct Labor Manufacturing Overhead (+) (All Fixed) Total Costs Net Income 15,000 5,000 25,000 15,000 5,000 25,000 350.000 $ 770.000 $ 130.000 475.000 $ 745.000 $ 155,000 350.000 $ 770.000 $ 130.000 350.000 $ 770.000 $ 130.000 Where applicable, Christian allocates both fixed and variable manufacturing overhead using direct labor hours as the driver. Pistons carries no work-in-process inventory. Standard costs have been stable over time, and Christian writes off all variances to cost of goods sold. For 2020, there was no flexible budget variance for fixed overhead. In addition, the direct labor variance represents a price variance. 1. Match each method below with the appropriate income statement (A, B, C, or D): Actual Absorption costing Normal Absorption costing Standard Absorption costing Standard Variable costing |||| 2. During 2020, how did Pistons' level of finished-goods inventory change? In other words, is it possible to know whether Blackstar's finished-goods inventory increased, decreased, or stayed constant during the year? 3. From the four income statements, can you determine how the actual volume of production during the year compared to the denominator (expected) volume level? 4. Did Pistons have a favorable or unfavorable variable overhead spending variance during 2020

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