Variable and absorption costing, explaining operating-income differences. EntertainMe Corporation manufactures and sells 50-inch television sets and uses standard costing. Actual data relating to January, February, and March 2017 are as follows: January February March Unit data: Beginning inventory 0 150 150 Production 1,500 1,400 1,520 Sales 1,350 1,400 1,530 Variable costs: $ 1.000 $ 1,000 $ 1.000 Manufacturing cost per unit produced Operating (marketing) cost per unit sold S 800 S 800 S 800 Fixed costs: Manufacturing costs $525.000 $525.000 $525.000 Operating (marketing) costs $130,000 $130,000 $130,000 Activate The selling price per unit is $3,300. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 1,500 units. There are no price, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs. Required: la. What is the unit product cos under (a) variable costing and (b) absorption costing. 1b. Prepare January, February, and March 2017 income statements for under (a) variable costing and (b) absorption costing. 2. Complete equation 1 below: EQUATION/Formula 1 can be used to reconcile the difference between the AC income and the VC income. Equation 1 is from p. 336. AC income VC income = fixed manufacturing OH cost in ending inventory under AC method fixed manufacturing OH cost in beginning inventory under AC method Short-hand used in lecture: AC income VC income = (End units Beg units)