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In: AccountingVARIABLE AND ABSORPTION COSTINGBenches on High began operations at the beginning of 2014. Thiscompany...VARIABLE AND ABSORPTION COSTINGBenches on High began operations at the beginning of 2014. Thiscompany produces and sells granite and marble benchtops, designedand customised to individual kitchen specifications. Rob Stone, theowner, is very happy with his overall profitability, but isconfused about some of the numbers. He is curious as to why, whenhe sold exactly twice as many bench tops in 2015 as he did in 2014,his reported annual profit is not exactly twice what it was in 2014(2014: $173,000). The company uses a standard costing system, andfixed manufacturing overheads are allocated according to the numberof units produced in 2014. There are no price, efficiency orspending variances in 2015. All variances are written off to Costof Goods Sold in the year in which they occur. Actual data areprovided in Exhibit 4. Exhibit 4 Actual Data for 2014 and 2015Sales Price (average) $ 1,000 per unit sold Variable manufacturingcosts 100 per unit produced Variable marketing costs 150 per unitsold Fixed manufacturing costs 20,000 Fixed administrative costs40,000 2014 2015 Units produced 500 400 Units sold 300 600Required: (a) Prepare an Income Statement for 2015 using absorptioncosting.(b) Prepare an Income Statement for 2015 using variable (direct)costing.(c) Write a brief comment to Mr Patz, explaining why the profitfor 2015 was not twice that of 2014. Include a numerical analysisto justify your explanation.