0 Question No. 4: Absorption and Marginal Costing (5 Marks; 20 Minutes) The Dorset Corporation produces and sells a single product. The following data refer to the year just completed: Beginning inventory Units produced 9,000 Units sold 7,000 Selling price per unit $ 47 Selling and administrative expenses: Variable per unit $ 4 Fixed per year $ 58,000 Manufacturing costs: Direct materials cost per unit 10 Direct labor cost per unit 6 Variable manufacturing overhead cost per unit 5 Fixed manufacturing overhead per year $ 90,000 Assume that direct labor is a variable cost. Required: a. Prepare an income statement for the year using absorption costing A A A b. Prepare an income statement for the year using variable costing C. Reconcile the absorption costing and variable costing net operating income figures