The Goble Company manufactures trendy, high-quality, moderately priced watches. As Gable'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 Gable's 2020 income statement. The following data are for the year ended December 31, 2020 Click the icon to view the data) Click the loon to view the assumptions.) Read the coquirements Requirement 1. Prepare income statements under variable and absorption costing for the your ended December 31, 2020 Begin by propuring the income statement under variable conting for the you onded December 31, 2020. Complete the top half of the come statement first, then complete the bottom portion Variable costing Adjustment for variances Allocated fixed manufacturing costs Beginning inventory Contribution margin Cost of goods available for sale Deduct ending inventory The Gable Company manufactures trendy, high-quality, moderately priced watches As Gable'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 Gable's 2020 income statement. The following data are for the year ended December 31, 2020 Click the icon to view the data) (Click the icon to view the assumption) Read the requirements 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 The Gable Company manufactures trendy, high-quality, moderately priced watches. As Gable'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 Gable's 2020 income statement. The following data are for the year ended December 31, 2020 m (Click the icon to view the data) Click the icon to view the assumptions) Read the requirements Requirement 2. What is Gable's operating income as percentage of revenues under each costing method? (Round the percentages to the nearest tenth percent XX%) Operating income as% of revenues Variable costing Absorption costing Requirement 3. Explain the difference in operating income between the two methods Operating income using variable costing a than operating income using absorption costing. The main difference between variable costing and absorption costing is the way Requirement 4. Which costing method would you recommend to the CFO? Why? The costing method should be recommended as it considers The Gable Company manufactures trendy, high-quality, moderately priced watches, As Gable'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 Gable's 2020 income statement. The following data are for the year ended December 31, 2020 Click the icon to view the data Click the icon to view the assumptions) Read the requirements Requirement 2. What is Gable's operating income as percentage of revenues under each coating method? (Round the percentages to the nearest tenth percent. XX Operating income as% of revenues Variable costing Absorption costing a portion of the operating costs used in the sale of units Requirement 3. Explain the difference in operating income between the tw a portion of the operating costs used to produce unts of output a Operating income using variable costing is than operating income all the manufacturing resources used in the sale of units absorption costing is the way all the manufacturing resources used to produce units of output Requirement 4. Which costing method would you recommend to the CFO The costing method should be recommended as it considers Data table Sable's Deratin 5% of Beginning inventory, January 1, 2020 Ending inventory, December 31, 2020 2020 sales 83,000 units 37.000 units 345,000 units $22.00 per unit $5.10 per unit $1.30 per unit sold $1,500,000 6,000 50 units per machine-hour $1,120,000 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 Standard production rate Fixed operating (marketing) costs the diffel variable costing ni g method Print Done (Click the icon to view the assumptions.) .... - Assumptions It tenth ating 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. com! nues % 1 % Print Done ce in ng and a sting is hod would you recommend to the CFO? Why? should be recommended as it considers