Manufacturing costs $($per unit$)$:$$Direct materials $(3$ lbs$.$ @ $1\mathrm{.}20).$ $$3\mathrm{.}60$Direct labor $(0\mathrm{.}4$ hr$.$ @ $17\mathrm{.}50)7\mathrm{.}00$ Variable overhead $(0\mathrm{.}4$ hr$.$ @ $5\mathrm{.}00)2\mathrm{.}00$ Fixed overhead $(0\mathrm{.}4$ hr$.$ @ $8\mathrm{.}00)3\mathrm{.}20$Total $$15\mathrm{.}80$ Selling and administrative costs:$$ Variable $$1\mathrm{.}60$ per unit$$ Fixed $$215,500$ During the year, the company had the following activity: Units produced $27,500$ Units sold $24,750$ Unit selling price $$34$ Direct labor hours worked $11,000$ Actual fixed overhead was $$13,200$ less than budgeted fixed overhead. Budgeted variable overhead was $$5,800$ less than the actual variable overhead. The company used an expected actual activity level of $11,000$ direct labor hours to compute the predetermined overhead rates. Any overhead variances are closed to Cost of Goods Sold. $1.$ Compute the unit cost using $($a$)$ absorption costing and $($b$)$ variable costing. $2.$ Prepare an absorption$-$costing income statement. Round your answers to the nearest cent. $3.$ Prepare a variable$-$costing income statement. Round your answers to the nearest cent. $4.$ Reconcile the difference between the two income statements. The absorption costing generates an income $$\_\_\_\_\_$ than variable costing.