P 14-B-2: Bong \& Alufson Speakers Bong \& Alufson (B\&A) Speakers manufactures portable Bluetooth speakers in Denmark. B\&A uses very special materials to form a protective shell for the speakers making them splash, dust, and sand resistant. The ideal product for a beach party! B\&A sells the speakers for 2,900 DKK per unit. Last year the company produced 666,000 speakers and sold 641,000 speakers. This year B\&A produced 641,000 speakers and sold 666,000 speakers. In both years B\&A's fixed manufacturing cost was 318,000,000 DKK and its variable manufacturing cost was 2,280 DKK per speaker. The CEO of B\&A commented, "I don't understand these crazy financial statements. Our prices and costs didn't change, we sell more speakers this year, and we show lower income. Something has got to be wrong." Required: a. Prepare income statements for B\&A for last year and this year using absorption costing. Assume that B\&A's only costs are the fixed and variable manufacturing costs given in the problem. b. Prepare income statements for B&A for last year and this year using variable costing. Assume that B\&A's only costs are the fixed and variable manufacturing costs given in the problem. c. Explain to the CEO of B\&A in nontechnical terms why the financial statements prepared by the accountant in part (a) are not in error. In other words, explain to the CEO why net income fell this year from last year even though B\&A sold more speakers