PRACTICE EXERCISES AND ANSWERS ON VARIABLE COSTING AND ABSORPTION COSTING 1. Disney Chicken, a company which is located in Dubai has only one product. The company has provided the following data concerning its most recent month of operations: 0 3,000 2,500 500 $150 Units in beginning inventory Units produced Units sold Units in ending inventory Selling price per unit Selling & Administrative expenses: Variable per unit Fixed (total) Manufacturing costs: Direct materials cost per unit Direct labor cost per unit Variable manufacturing overhead cost per unit Fixed manufacturing overhead (total) $10 $8,000 $45 $50 $8 $80,000 Required: a. Calculate the unit product cost using the variable costing system b. Prepare an income statement using the variable costing system. c. Calculate the unit product cost using the Absorption costing system d. Prepare an income statement using the Absorption costing system e. Calculate and explain the difference in the reported net operating between the above methods