The Zenith Company manufacture vandy, Highway, moderately priced watches As Zwalc's venir Sinancial analyst, you me asked to recommend a method of Inventory conting. The chief financial officer (CFO) will use your recommendation to prepare wato's 2020 income statement. The folosing data are for the year ended December 31, 2020 Celoto vw the data on view the assumptions) Read the Requirements. Prepare income statements under veritable and absorption costing for the year ended December 31, 2020. Begin by puring the comment under valabile couting for the year ended December 31, 2020 Cong the top of the income statement first, then complete the bottom portion Variable costing Help Me Solve This Text Pages Get More Help Clear All Check Answer DE Dar Requirements X in in 1. Prepare income statements under variable and absorption costing for the year ended December 31, 2020. 2. What is Zwatch's operating income as 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 Assumptions 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. Print Done Assumptions 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. Print Done Data Table Beginning inventory, January 1, 2020 Ending inventory, December 31, 2020 2020 sales 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 87,000 units 36,000 units 375,000 units $22.00 per unit $5.60 per unit $1.70 per unit sold $1,485,000 6,600 50 units per machine-hour $1,070,000 Print Done