E$6-40$A Prepare income statements using variable costing and absorption costing with changing inventory levels $($Learning Objective $6)$Hadlock Manufacturing manufactures a single product that it will sell for $$68$ per unit. The company is looking to project its operating income for its first two years of operations. Cost information for the single unit of its product is as follows:$$ Direct material per unit produced $$30$ Direct labor cost per unit produced $$11$ Variable manufacturing overhead $($MOH$)$ per unit produced $$5$ Variable operating expenses per unit sold $$3$ Fixed manufacturing overhead $($MOH for each year is $$176,000,$ while fixed operating expenses for each year will be $$86,000.$ During its first year of operations, the company plans to manufacture $22,000$ units and anticipates selling $16,000$ of those units. During the second year of its operations, the company plans to manufacture $22,000$ units and anticipates selling $24,000$ units $($it has units in beginning inventory for the second year from its first year of operations$).$Requirements$1.$ Prepare an absorption costing income statement for the following: a$.$ The first year of operations b$.$ The second year of operations $2.$ Before you prepare the variable costing income statements for Hadlock, predict the company$$s operating income using variable costing for both its first year and its second year without preparing the variable costing income statements. Hint: Calculate the variable costing operating income for a given year by taking that year$$s absorption costing operating income and adding or subtracting the difference in operating income as calculated using the following formula: $3.$ Prepare a variable costing income statement for each of the following years:a$.$ The first year of operationsb. The second year of operations