Hi there! I am just having some issues grasping the concept of Absorption & Variable Costing in Managerial Accounting and was wondering if anyone could help. My professor suggested a scenario that I should practice with, but I am still having troubles understanding it completely. Here is the scenario:

A company sells a product for $25. Unit-level

manufacturing costs for each unit are as follows:

Direct materials, $5.00

Direct manufacturing labour, $4.50

Variable manufacturing overhead, $3.25

Additionally within this scenario,

Marketing expenses, $1.50 per unit plus $35,000 per year.

Total fixed manufacturing overhead costs are $60,000 per year.

The current production level is 25,000 units per year

Company is budgeting for the sale of 22,000 units in the next year.

My professor has suggested me to solve how to do 2 main things

1.) How to make a budgeted statement of comprehensive income for the year using variable costing.

2.) How to make a budgeted statement of comprehensive income for the year using absorption costing.

Any help in helping me solve this question will greatly help me and my understanding for this concept on the exam. Thanks!