'This makes no sense at all,' said Bill Sharp, managing director of Essex Company. 'We sold the same number of units this year as we did last year, yet our profits have more than doubled. Who made the goof the computer or the people who operate it?' The statements to which Mr Sharp was referring are shown below (absorption costing basis): The statements above show the results of the first two years of operation. In the first year, the company produced and sold 20,000 units; in the second year, the company again sold 20,000 units, but it increased production in order to have a inventory of units on hand, as shown below: Essex Company produces a single product, fixed manufacturing overhead costs are applied to the product on the basis of each year's production. (Thus, a new fixed manufacturing overhead rate is computed each year.) Variable selling and administrative expenses are 1 per unit sold. Required: 1.Compute the unit product cost for each year under absorption costing and variable costing. (Round your answers to 2 decimal places.) 'This makes no sense at all,' said Bill Sharp, managing director of Essex Company. 'We sold the same number of units this year as we did last year, yet our profits have more than doubled. Who made the goof the computer or the people who operate it?' The statements to which Mr Sharp was referring are shown below (absorption costing basis): The statements above show the results of the first two years of operation. In the first year, the company produced and sold 20,000 units; in the second year, the company again sold 20,000 units, but it increased production in order to have a inventory of units on hand, as shown below: Essex Company produces a single product, fixed manufacturing overhead costs are applied to the product on the basis of each year's production. (Thus, a new fixed manufacturing overhead rate is computed each year.) Variable selling and administrative expenses are 1 per unit sold. Required: 1.Compute the unit product cost for each year under absorption costing and variable costing. (Round your answers to 2 decimal places.)