Honeyland standard costing to produce a particularly popular type of candy, Honeyland's President, Tim Thome was unhappy after reviewing the income statements for the first 3 years of business. He said. "I was told by our accountants-and in fact, I have memorized-that our breakeven volume is 29,000 units was happy that we reached that sales goal in each of our first 2 years. But here's the strange thing in our first year, we sold 29,000 units and indeed brake even Then, in our second year we sold the same volume and had a significant, positive operating income. I didn't complain, of course..but here's the bad part in our third year, we sold 20% more candy, but our operating income droy By nearly 50% from what it was in the second year! We didn't change our selling price or cost structure over the past 3 years and have no price, efcence, or spending variances to what's going on Click the icon to view the option costing income statements for the three years) Rahments Data table 1 Absorption Costing 2 Sales (units) Contbution margin per unit Breakeven quantity 3 Revenues 2019 1 2020 1 127,000 1,827,000 9 29,000 83 25.000 5 20213 1,827,000 29.000 4 Cost of goods sold Beginning inventory Production Requirement 3. Prepare a variable costing tased income statement for each year. Explain the variation in 7 Available for sale Deduct ending inventory 2018 2020 2021 29.000 29.000 2.233.000 2.231.000 34800 2.679.800 table cost of goods sold Adjustment for production-volume 0 variance 10 Cost of goods sold 11 Gross margin Beginning inventory Variatie manufacturing costs Desuct ending eventory Variable cost of goods sold 12 Selling and administrative expenses (all fixed) 13 Operating income 14 Beginning inventory 15 Production (units) 16 Sales (units) 2019 29,000 2020 29,000 2021 34,000 - X $2.233.000 $ 2.233.000 5 2.679,600 D 400,000 2.000.000 2,000,000 0 2,436,000 2,030,000 2.436.000 2,436,000 (400,000) (324.800) 2.030.000 203.000 527,500 1.706.200 2,436,000 243,000 203,000 203.000 203,000 $ 0$ 324.000 40,000 0 5,000 29.000 29,000 34.800 29.000 29,000 34,800 canal all input feid