Problem $1$: $(15$ points$)$ The Wonka Company produces and sells one product. The following data refer to the first year just completed:

Beginning inventory............................................. $0$

Units produced................................................... $40,000$

Units sold......................................................... $35,000$

Sales Price per unit.............................................. $200$

Selling and administrative expenses:

Variable per unit............................................... $$10$

Fixed $($total$)....................................................$ $$160,000$

Manufacturing costs:

Direct materials cost per unit................................. $$50$

Direct labor costs per unit.................................... $$40$

Variable manufacturing overhead cost per unit $...........$ $$20$

Fixed manufacturing overhead $($total$)......................$ $$400,000$

Required:

A$.$ Compute the product cost of a single unit using the absorption costing method and the variable costing method.

B$.$ Prepare an income statement for the year using absorption costing.

C$.$ Prepare a contribution format income statement for the year using variable costing.

D$.$ Why is there a difference between the net operating income from absorption costing and variable costing?