The appropriate income statement for the method of costing.

Step 1. To determine: The appropriate income statement for the method of costing. Explanation: Absorption Costing is the method of costing in which the enterprise accounts for the indirect expenses or the overheads along with the direct costs. There are three ways of absorption costing and variable costing which are actual costing, normal costing, and standard costing. In actual absorption costing, the overhead costs variance and the direct materials variance are compared with the actual results and the variances are zero. This is done in the income statement C, so the method used is absorption costing. Step 2. To determine: The way in which the level of finished-goods inventory has changed and whether it is possible to know whether finished-goods inventory increased, decreased, or stayed constant in the year 2013. Step 3. To determine: The way in which the actual volume of production during the year is compared to the denominator volume level. Step 4. To determine: Whether the variable overhead spending variance is favorable or unfavorable.