3: Lukin Corporation reports the following first-year production cost information: Sales Price direct labor $30 per unit $2 per unit direct materials $3 per unit variable overhead $4 per unit sales commission $15,000 administrative costs $12,000 of which $1,000 fixed cost fixed overhead $9,000 1. Prepare income statements using both variable and absorption costing for sales of 20,000 unit in 2019 for production 30,000 units. (10 point) 2. Does the amount of income differ between the variable cost methods and the absorption method? Explain. (5 point) 3. Income report under variable cost method shows that; When the units produced equal units sold in 2018 (30,000 units), the income is $594,000. Furthermore, the income was $388,000 in 2020 as well, when units produced were 8,000 less than units sold. Managers make a decision to convert reports under variable costs to absorption method reports. (5 point) Q4: Moti Company makes pocket diary that sells for $40 each. For the coming year, management expects fixed costs to totaled $440,000 and variable costs to be $18.00 per unit. (10 point) 1. Compute the contribution margin per unit. (2 point) 2. Compute the contribution margin per unit. (2 point) 3. Compute break-even sales using the contribution margin (CM) ratio. (2 point) 4. Compute the margin of safety percentage assuming actual sales are $1,000,000. (2 point) 5. Compute the sales required to earn net income of $330,000. (2 point)