ZBest Mfg$.$ reports the following data for $2017$:

Direct Materials Cost $$8$ per unit Units Produced $30,000$ units

Direct Labor Cost $$12$ per unit Units Sold $21,000$ units

Variable Overhead $$7$ per unit Variable Selling and Admin Expenses $$3$ per unit

Fixed Overhead $$825,000$ per year Fixed Selling and Admin Expenses $$137,000$ per year

Sales Price $$92$ 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. Please write at least three sentences.

$4.$ Explain when variable costing is a preferred method over absorption costing. Please write at least three sentences.

Zbest MFG Zbest MFG

Income Statement $($Absorption Costing$)$ Income Statement $($Variable Costing$)$

For the Year Ended December $31,2017$ For the Year Ended December $31,2017$