Exam 3 Part II - Word Title Styles References Mailings Review View Help Tell me what you want to do A A A E EEEE 2 T AaBbCd AaBCCD AaBbc AaBbccc Aa Aay.A 1 Normal 1 No Spac... Heading 1 Heading 2 Paragraph 3. Smooth Ride Inc. manufactures tires specifically designed for electric cars. Summarized data for 2019 (the first year of operations) are as follows: Sales (105,000 tires) $13,125,000 Production costs (120,000 tires) Direct materials 4,750,000 Direct labor 3,675,000 Manufacturing overhead Variable 2,300,000 Fixed 950,000 Operating expenses (selling and administrative) Variable 1,050,000 Fixed 800,000 a. Prepare an income statement based on full absorption costing. b. Prepare an income statement based on variable costing. C. Smooth Ride follows generally accepted accounting standards. Which method, full absorption or variable costing, will the company use to report its net income to external parties? O E 0 a