The Baxta Company manufactures trendy, high$-$quality, moderately priced watches. As Baxta's senior financial analyst, you are asked to recommend a method of inventory costing. The chief financial officer $($CFO$)$ will use your recommendation to prepare Baxta's $2020$ income statement. The following data are for the year ended December $31,2020$:Assume standard costs per unit are the same for units in beginning inventory and units produced during the year. Also, assume no price, spending, or efficiency variances. Any production$-$volume variance is written off to cost of goods sold.Beginning inventory, January $1,202087,000$ unitsEnding inventory, December $31,202031,000$ units$2020$ sales$283,000$ unitsSelling price $($to distributor$)$$$20\mathrm{.}50$ per unitVariable manufacturing cost per unit, including direct materials$$4\mathrm{.}80$ per unitVariable operating $($marketing$)$ cost per unit sold$$1\mathrm{.}30$ per unit soldFixed manufacturing costs$$1,185,600$Denominator$-$level machine$-$hours$5,700$Standard production rate$40$ units per machine$-$hourFixed operating $($marketing$)$ costs$$1,070,000$Now prepare the income statement under absorption costing for the year ended December $31,2020.$ Complete the top half of the income statement first, then complete the bottom portion. $($Label any variances as favorable $($F$)$ or unfavorable $($U$).)$Absorption costing