You have joined the C&P Camera as an accountant and gone through the activities for the...

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You have joined the C&P Camera as an accountant and gone through the activities for the last year, 2023. Carl agreed to pay the annual salary of $60,000 to you as an accountant but you need to handle some administrative work as well. The rent of the warehouse is $190,000 per year and the office is in the same building. You decided to allocate 20% of the rent to the administrative office and the balance is the manufacturing warehouse. The miscellaneous cost incurred in the administrative office was $5,000 per year and this cost is expected to remain the same amount for years to come. In the manufacturing plant, there is a full-time supervisor who gets paid $80,000 per year for supervising the production and the casual staff. The machine maintenance cost is $25,000 per year and another factory- related miscellaneous cost is $13,000 per year. These costs are expected to remain the same amount for years to come. C&P has a contract with a delivery firm for delivering cameras to their security system suppliers across Australia. The delivery is arranged only once a month. The delivery information and costs for the last 7 months are as follows: Table 1: Delivery cost and units Month Camera delivered Delivery costs January 8500 $3200 February 10500 $3750 March 5000 $2200 April 6000 $2800 May 5500 $2350 June 2500 $1750 July 7000 $2950 In the last year (2023), C&P Camera has manufactured 60,000 security cameras, and the material costs incurred in the last year are given in Table 2. There was no opening inventory, work-in-process inventory, or finished goods but there were 5000 cameras (finished goods) remaining at the end of the last year. Table 2: Material quantity and cost Materials Quantity Total cost Camera lens 60,000 units $900,000 Plastic body 60,000 units $480,000 Metal interior structure 60,000 units $600,000 Power cable 120,000 meters $30,000 Casual staff handling all manufacturing, assembling, and testing processes. In the first phase, machine operators manufacture certain parts, and it takes 30 minutes to manufacture parts per camera. Machine operators are paid $30 per hour. In the assembling section, staff assemble the unit, and it takes 20 minutes per camera, and staff is paid $25 per hour. Once the assembling is done, then pass to the electrical team to do wiring and testing. It takes 10 minutes per camera and electricians are paid $40 per hour. In a recent meeting, Patrick said, "We have to make various decisions based on our last year's operating profit". However, you informed Patrick that "we can produce operating profit using two different methods: absorption costing which is required by the regulations, and variable costing which can be used in our internal decision making, and profit may be different. So, we have to be very careful when we make decisions". However, Patrick questioned how profit can be different for the same period. The cameras are sold for $80 each. Required: a). Prepare the income statement for the last year using the variable costing method and absorption costing method (The normal level of production is 60,000 motors which is used in allocating fixed production). (Exhibit You have joined the C&P Camera as an accountant and gone through the activities for the last year, 2023. Carl agreed to pay the annual salary of $60,000 to you as an accountant but you need to handle some administrative work as well. The rent of the warehouse is $190,000 per year and the office is in the same building. You decided to allocate 20% of the rent to the administrative office and the balance is the manufacturing warehouse. The miscellaneous cost incurred in the administrative office was $5,000 per year and this cost is expected to remain the same amount for years to come. In the manufacturing plant, there is a full-time supervisor who gets paid $80,000 per year for supervising the production and the casual staff. The machine maintenance cost is $25,000 per year and another factory- related miscellaneous cost is $13,000 per year. These costs are expected to remain the same amount for years to come. C&P has a contract with a delivery firm for delivering cameras to their security system suppliers across Australia. The delivery is arranged only once a month. The delivery information and costs for the last 7 months are as follows: Table 1: Delivery cost and units Month Camera delivered Delivery costs January 8500 $3200 February 10500 $3750 March 5000 $2200 April 6000 $2800 May 5500 $2350 June 2500 $1750 July 7000 $2950 In the last year (2023), C&P Camera has manufactured 60,000 security cameras, and the material costs incurred in the last year are given in Table 2. There was no opening inventory, work-in-process inventory, or finished goods but there were 5000 cameras (finished goods) remaining at the end of the last year. Table 2: Material quantity and cost Materials Quantity Total cost Camera lens 60,000 units $900,000 Plastic body 60,000 units $480,000 Metal interior structure 60,000 units $600,000 Power cable 120,000 meters $30,000 Casual staff handling all manufacturing, assembling, and testing processes. In the first phase, machine operators manufacture certain parts, and it takes 30 minutes to manufacture parts per camera. Machine operators are paid $30 per hour. In the assembling section, staff assemble the unit, and it takes 20 minutes per camera, and staff is paid $25 per hour. Once the assembling is done, then pass to the electrical team to do wiring and testing. It takes 10 minutes per camera and electricians are paid $40 per hour. In a recent meeting, Patrick said, "We have to make various decisions based on our last year's operating profit". However, you informed Patrick that "we can produce operating profit using two different methods: absorption costing which is required by the regulations, and variable costing which can be used in our internal decision making, and profit may be different. So, we have to be very careful when we make decisions". However, Patrick questioned how profit can be different for the same period. The cameras are sold for $80 each. Required: a). Prepare the income statement for the last year using the variable costing method and absorption costing method (The normal level of production is 60,000 motors which is used in allocating fixed production). (Exhibit