Problem Two Straightforward Problem on Absorption versus Variable Costing (LO 2, 3, 4, 6) Cow Dippers, Inc. produces non-fat frozen yogourt. The product is sold at wholesale in 10-litre commercial containers, which have the following price and variable costs. Sales price $30 Direct material 10 Direct labour 4 Variable overhead Budgeted fixed overhead in 20x4, the company's first year of operations, was $600,000. Actual production was 150,000 10-litre containers, of which 125,000 were sold. Cow Dippers, Inc. incurred the following selling and administrative expenses. Fixed $100,000 for the year Variable$2 per container sold Required: 1. Compute the product cost per container of frozen yogurt under (a) variable costing and (b) absorption costing. 2. Prepare income statements for 20x4 using (a) absorption costing and (b) variable costing 3. Reconcile the income reported under the two methods by listing the two key places where the income statements differ. 4. Reconcile the income reported under the two methods using the shortcut method