ZBest Mfg. reports the following data for 2017: Direct Materials Cost $7 per unit Units Produced 25,000 units Direct Labor Cost $11 per unit Units Sold 18,000 units Variable Overhead $6 per unit Variable Selling and Admin Expenses $4 per unit Fixed Overhead $725,000 per year Fixed Selling and Admin Expenses $125,000 per year Sales Price $90 per unit

1.Prepare an income statement for 2017 under absorption costing
2.Prepare an income statement for 2017 under variable costing
3. Explain when absorption costing is a preferred method over variable costing?
4. Explain when variable costing is a preferred method over absorption costing?