The Zwalch Company manufactures trendy, high-quality moderately priced watches. As Zwalch's senior financial analyst, you are asked to recommend a method of inventory costing. The CFO will use your recommendation to prepare watch's 2017 income statement. The following data are for the year ended December 31, 2017: Click the icon to view the data) Assume standard costs per un are the same for units in beginning inventory and units produced during the year. Also, assume no price, spending or ency varaos. Any production-volume variance is written off to cost of goods sold in the month in which it occur. Requirements 1. Prepare income statements under variable and absorption costing for the year ended December 31, 2017 2 What is watch's operating income as percentage of revenues under each costing thed? 3. Explain the difference in operating income between the two methods 4. Which costing method would you recommend to the CFO? Why? RO Data Table 31, 2017 the top half of the income statement first, then complete the bottom portion. BA 80,000 units 30,000 unita 429,000 un Beginning inventory, January 1, 2017 Ending Inventory, December 31, 2017 2017 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 Faed operating marketing costs $22.00 per unit $4.90 per unit $180 per un sold $1,800,000 5,400 60 per machine hour $1,110,000 Print Done Atv O w MacBorik Pro