The Garrard Company manufactures trendy, high-quality, moderately priced watches. As Garrard's senior financial analyst, you are asked to recommend a method of inventory costing The CFO will use your recommendation to prepare Garrard's 2018 statement of comprehensive income. The following data are for the year ended December 31, 2018 (Click the icon to view the data.) Assume standard costs per unit are the same for units in beginning inventory and units produced during the year. Also, assume no price, rate, or efficiency variances. Any production-volume variance is written off to COGS in the month in which it occurs. Required . Begin by preparing the statement of comprehensive income under variable costing for the year ended December 31, 2018 Complete the top half of the statement of comprehensive income first, and then complete the bottom portion (Complete all answer boxes Use parentheses or a minus sign for an operating loss.) Variable costing Deduct Choose from any list or enter any number in the input fields and then click Check Answer Help Me Solve This e Text Pages Get More Help Clear All Check Answer 10:10 AM Adjustment for variances Assignment Allocated fixed manufacturing costs Beginning inventory , moderately priced watc comprehensive income Contribution margin 1 beginning inventory and Cost of goods available for sale Ending inventory me under variable costi S. Use parentheses or a Fixed manufacturing overhead costs Fixed manufacturing overhead costs Assignment Fixed operating costs moderately priced watches. A comprehensive income. The f Gross margin Operating income (loss) beginning inventory and units Revenues Variable cost of goods sold me under variable costing for s. Use parentheses or a minu Variable manufacturing costs Deduct Choose from any list or enter any number in the input fields and then click Che Variable cost of goods sold Variable manufacturing costs me under variable costing fc s. Use parentheses or a min Variable operating costs Question 88,000 units Beginning inventory, January 1, 2018 Ending inventory, December 31, 2018 34,000 units 2018 sales 293,000 units $ 20.00 per unit $ 5.70 per unit Selling price (to distributor) Variable manufacturing cost per unit, including direct materials Variable operating (marketing) cost per unit sold Fixed manufacturing costs Denominator-level machine-hours $ 1.60 per unit sold $ 1,165,600 6,200 Standard production rate 40 units per machine-hour $ 1,050,000 Fixed operating (marketing) costs Print Done Required 1. Prepare statements of comprehensive income under variable and absorption costing for the year ended December 31, 2018 2. What is Garrard's operating income as a percentage of revenues under each costing method? 3. Explain the difference in operating income between the two methods 4. Which costing method would you recommend to the CFO? Why? Print Done ut fields and then click Check