Dec/ (20 points) The Zwatch Company manufactures trendy, high quality, moderately watches. As Zwatch's senior financial analyst, you are asked to recommend a un prepare Zwatch's of inventory costing. The CFO will use your recommendation to income statement. The following data are for the year ended December 31, 2014 ginning inventory, January 1, 2014 100,000 units 50,000 units 400,000 units $25 per unit Variable manufacturing cost per unit, including direct materials$6 per unit Ending inventory, December 31, 2014 2014 sales Selling price (to distributor) Variable operating (marketing) cost per unit sold $2 per unit sold $1,625,000 6,500 Fixed manufacturing costs Denominator-level machine-hours Standard production rate Fixed operating (marketing) costs 50 units per machine-hour $1,100,000 Assume standard costs per unit are the same for units in beginning inventory and units production-volume variance is written off to cost of goods sold in the month in which it produced during the year. Also, assume no price, spe nding, or efficiency variances. Any ccurs 1. (15 points) Prepare income statements under variable and absorption costing for the year ended December 31, 2014. (3 points) What costing method? is Zwatch's operating income as percentage of revenues under each difference in operating income between the two methods. h costing method would you recommend to the CFO? Why