Chapter 6 - Absorption Costing vs. Variable Costing Frances Manufacturing manufactures a product that it will sell for $200 per unit. The company is looking to project its operating income for its first two years of operations. Cost information for the single product is as follows: - Direct materials per unit produced $40 - Direct labor cost per unit produced $16 - Variable manufacturing overhead (MOH) per unit produced $8 - Variable operating expenses per unit sold $4 - Total fixed manufacturing (MOH)$286,000 - Total fixed operating expenses $81,000 During its first year of operations, the company plans to manufacture 22,000 units and anticipates selling 15,000 of those units. During the second year of its operations, the company plans to manufacture 22,000 units and anticipates selling 27,000 units. It will have units in beginning inventory for the second year, from its first year of operations) Prepare an absorption costing income statement, and variable costing income statement for its first and second year of operations