.:: ..... A Selling price per.unit ......... Direct material per unit. ..... ........$ Direct labor.per. unit .............................. A 46.00 13.00 7.00 117,000 52,000 6.00 45,000 Total annual manufacturing overhead ................$ Fixed portion of annual manufacturing. overhead. ... Variable operating expenses per unit sold. ............ $ Fixed operating expenses per year in total .............. $ A Units.manufactured ...... ILICULUL U . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,000 Units.manufactured . ...... 13,000 12,000 Units.sald.... U T IL . UI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Prepare two income statements for the year, one using absorption costing and one using variable costing. Use those statements to answer the following questions: a. What is the product cost per unit using absorption costing? b. What is the product cost per unit using variable costing? c. What is the ending inventory balance using absorption costing? d. What is the ending inventory balance using variable costing? e. What is cost of goods sold using absorption costing? f. What is cost of goods sold using variable costing? What is operating income using absorption costing? h. What is operating income using variable costing? 1 g. What is operating income using absorption costing? h. What is operating income using variable costing? 2. What is the underlying reason for the difference in operating income between the two costing methods? Requirement 1. Prepare two income statements for the year, one using absorption costing and one using variable costing. Begin by preparing the income statement for the year using absorption costing. Spade Industries Income Statement (Absorption Costing) ICUU LIITTUUUIUITIUIILU For the Year Ended Sales revenue 552000 Less: Cost of goods sold Gross profit Less: Operating expenses Less: Operating expenses Operating income