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The accounting team at Bonita is considering its options for reporting performance at the end...

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Accounting

The accounting team at Bonita is considering its options for reporting performance at the end of this year. Bonita specializes in mylar balloons, which it sells for $0.72 each. Bonita has used only absorption costing within its standard costing system, but management team members feel uneasy about Bonita's most recent year's modest income (despite higher-volume sales than the previous year). They wonder if there is a different way to put the financial statements together that would provide a more consistent-and perhaps conservative-presentation of performance.
Some people on the accounting team have experience with variable costing, so they suggest putting together a side-by-side comparison of both costing systems for the past two years in order to compare the results. Following are the budgeted costs and budgeted production that were in place for both years, along with actual volume information for each year.
\table[[Budgeted Information for Both Years],[Direct materials,$0.09 per unit],[Direct labor,$0.09 per unit],[Variable-MOH,$0.04 per unit],[Variable selling expense,$0.04 per unit],[Fixed-MOH,$18,000
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