Exercise 8.22: I need step by step solutions with explanations. Question is attached as an image in this discussion box.

E822 Calculate the product cost under absorption costing and variable costing, prepare an absorptioncosting income statement, and compare the usefidness of the variableeosting versus the absorption-costing format. (LO 1, g. i) Empey Manufacturing produces towels to be sold as souvenirs at sporting ever throughout the world. Assume that units produced equalled units sold in 2020. The compan variable-costing income statement and other data are as follows: EMPEY MANUFACTURING Income Statement Year Ended December 31, 2020 Variable Costing Sales (260.700 units) $521,400 Variable cost of goods sold 3255.486 Variable selling expenses 31,284 Variable administrative expenses 36.498 323.268 Contribution margin 198.132 Fixed manufactm'ing overhead 96,459 Fixed selling expenses 38,500 Fixed administrative expenses 42.625 177.584 Net income 3 20,548 Unit selling price $2.00 Variable costs per unit Direct material 0.26 Direct labour 0.34 Variable overhead 0.38 Variable selling expenses 0.12 Variable administrative expenses 0.14 Instructions a. Calculate the manufacturing cost per towel under variable costing. b. Calculate the manufacturing cost per towel under absorption costing. c. Prepare an absorption-costing income statement for Empey Manufacturing. d. Explain why there is or is not a difference in the net income amounts in the two income statements. e. Explain why Empey Manufacturing might want to prepare both an absorption-costing income statement and a variable-costing income statement