It is the end of 2017. Mulberry All-Fixed Corporation began operations in January 2016. The company is so named because it has no variable costs. All its costs are fixed; they do not vary with output. Mulberry All-Fixed Corp. is located on the bank of a river and has its own hydroelectric plant to supply power, light, and heat. The company manufactures a synthetic fertilizer from air and river water and sells its product at a price that is not expected to change. It has a small staff of employees, all paid fixed annual salaries. The output of the plan can be increased or decreased by pressing a few buttons on a keyboard. The following budgeted and actual data are for the operations of Mulberry All - Fixed (Click the icon to view the budgeted and actual data) Data table The company uses budgeted production as the denominator level and writes off any production-volume variance to cost of goods sold. Sales Production Selling price Costs (all fixed): Manufacturing 2016 2017 30,000 tons 30,000 tons 60,000 tons 0 tons $88 per ton $88 per ton $2,100,000 $2,100,000 $100,000 Operating (nonmanufacturing) $100,000 (a) Management adopted the policy, effective January 1, 2017, of producing only as much product as needed to fill sales orders. During 2017, sales were the same as for 2016 and were filled entirely from inventory at the start of 2017. Now prepare the (b) absorption costing income statement for 2016, 2017, and the two year total (Enter a "0" for any $0 balances. Use parentheses or a minus sign for an operating loss. Label each variance as favorable (F) or unfavorable (U). Use units of production as the denominator level in the allocation rate.) Revenue Cost of goods sold Beginning inventory Allocated fixed manufacturing costs Us ds s Deduct ending inventory Cost emer All Adjustment for production-volume variance Total cost of goods sald Gross margin Operating costs Operating income (loss) Requiremen 2016 2017 Total Requirement 2. What is the breakeven point under (a) variable costing and (b) absorption costing? Calculate the breakeven point under (a) variable costing. (Round your answer up to the nearest unit.) The breakeven point under variable costing is units Calculate the breakeven point under (b) absorption costing. (Round any intermediary calculations to the nearest cent. Round your final answer up to the nearest unit.) The breakeven point under absorption costing when sales are tons is units. Requirement 3. What inventory costs would be carried in the balance sheet on December 31, 2016 and 2017, under each method? (Complete all answer boxes. For accounts with a 50 balance, enter a $0 in the appropriate cell.) Variable costing Absorption costing (nonmanufacturing) December 31, 2016 December 31, 2017 All ts Requirement 4. Assume that the performance of the top manager of the company is evaluated and rewarded largely on the basis of reported operating income. Which costing method would the manager prefer? Why? Most managers would prefer Operating income is affected by both production and sales under costing because their performance in any given reporting period, at least in the short run, is influenced by