Hypothetical Example: Units produced each year Units Sold Beginning Inventory (in units) Ending Inventory (in units) Selling price Direct materials Direct Labor Variable manufacturing overhead Variable selling & Administrative expenses Fixed manufacturing overhead Fixed selling and administrative expenses 6000 5000 0 1000 $ 20 per unit $ 2 per unit $ 4 per unit $ 1 per unit $3 per unit $ 30000 $ 10000 Required Computations: 1.Compute unit product cost under absorption costing 2.Compute unit product cost under variable costing 3.Compute period cost under variable costing 4.Compute period cost under absorption costing 5. Prepare income statement using variable costing method 6. Prepare income statement using absorption costing method 7. What is the reason for the differences in net income between the two costing methods