4. On August 31, the end of the first year of operations during which 18,000 units were ving income statement manufactured and 13,500 units were sold Fairfield Innenared the following income sta based on the variable costing concept: Fairfield Inc. Variable Costing Income Statement For Year Ended August 31.20.. Sales $397,000 Variable cost of goods sold: Variable cost of goods manufactured $388,000 Less ending inventory 72.000 Variable cost of goods sold 316,000 Manufacturing margin $ 81,000 Variable selling and administrative expenses 40,500 $ 40,500 Contribution margin Fixed costs: Fixed manufacturing costs $ 10,000 Fixed selling and administrative expenses 12.800 22,800 Income from operations $ 17,700 A. Determine the unit cost of goods manufactured, based on (a) the variable costing concept and (b) the absorption costing concept. B. From a product costing perspective, what is the basic difference between absorption costing and variable costing? Which method is better suited for external users and why? C. Fairfield is operating at 85% capacity and is considering a proposal to increase current production by 25%. Which costing method, absorption or variable costing, should be used to evaluate the proposal and why? D. If the proposal would increase current production by 10%, would your answer be different? Why