Question 1 (4 points) Please use the following information for the next 4 questions: Perfect Electronic Devices (PED) is a manufacturing company. Management has collected the following data for consideration: Year 1 Year 2 Year 3 Variable Costing Operating Income $14,263 ($13,212) ($40,310) Absorption Costing Ope ating Income $14,263 $15,585 $16,482 In both, the cost structure of the company is constant from year to year. Selling prices, unit variable costs, and total fixed costs are the same in every year. However, unit sales and/or unit production levels mayvary from year to year. Required: A) Were unit sales constant year to year? Explain. B. Format I A To + N co S B) What was the relationship between unit sales and unit production levels in each year? (Hint: equal to, greater than, less than) Format V Uv A Ev Olle tv OOO : Question 3 (3 points) C) For each year, indicate whether inventories grew or shrank. Question 4 (5 points) D) Given the patterns of costing above, which costing method would you recommend to provide a better reflection of economic reality, variable costing or absorption costing? Explain. Format B I Uv / Ev ola + v