The Osborne Company uses an absorption-costing system based on standard costs. Variable manufacturing cost consists of direct material cost of $5.00 per unit and other variable manufacturing costs of $1.20 per unit. The standard production rate is 10 units per machine-hour. Total budgeted and actual fixed manufacturing overhead costs are $385,000. Fixed manufacturing overhead is allocated at $7 per machine-hour based on fixed manufacturing costs of $385,00055,000 machine-hours, which is the level Osborne uses as its denominator level. The selling price is $14 per unit. Variable operating (nonmanufacturing) cost, which is driven by units sold, is $2 per unit. Fixed operating (nonmanufacturing) costs are $90,000. Beginning inventory in 2020 is 20,000 units; ending inventory is 35,000 units. Sales in 2020 are 475,000 units. The same standard unit costs persisted throughout 2019 and 2020 . For simplicity, assume that there are no price, spending, or efficiency variances. Read the requirements. Requirement 1. Prepare an income statement for 2020 assuming that the production-volume variance is written off at year-end as an adjustment to cost of goods sold. Complete the top half of the income statement first, then complete the bottom portion. (Label the variance as favorable (F) or unfavorable (U).) Requirement 2. The president has heard about variable costing. She asks you to recast the 2020 statement as it would appear under variable costing. Requirement 3. For each cost category, summarize total assembly department costs for October 2020 and calculate cost per equivalent unit. Begin by summarizing the total assembly department costs for October 2020. Now calculate cost per equivalent unit for each cost category. More info The process-costing system at Larsen Company has a single direct-cost category (direct materials) and a single indirect-cost category (conversion costs). Direct Data table materials are added at the beginning of the process. Conversion costs are added evenly during the process. When the assembly department finishes work on each car seat, it is immediately transferred to testing. Larsen Company uses the weighted-average method of process costing