HEHE 12-08 PROBLEM 4 (Continued) 3. Prepare a variable-costing income statement. Chacer 4. Reconcile the difference between the two income statements. 160 PROBLEM 4 Belmont, inc. has just completed its first year of operations. The unit costs on a normal s basis are as follows Manufacturing costs: Direct materials (3 bs. @ $2).. Direct labour (2 hrs. @18) Variable overhead (2 hrs. @$1.75). Fixed overhead Total Selling and administrative costs Variable. Fixed. $6.00 per unit 16.00 per unit 3.50 per unit L2 $4.00 per unit $100,000 20,000 16,000 During the year, the company had the following activity Units produced Units sold. Unit selling price Direct labour hours worked. $50 40,000 Actual fixed overhead was $170,000 for the year, and actual variable overhead was $72,000 Bu geted fixed overhead was $180,000, and the company used an expected activity level of 40. direct labour hours to compute the predetermined overhead rates. Any overhead variance are closed to Cost of Goods Sold. Instructions: 1. Compute the unit cost using each of the following: a. absorption costing b. variable costing PROBLEM 4 (D