9. Liwa Plastic company's first two years of operations, the company reported absorption costing net operating income as follows: Sales (at $25 per unit) Less: Cost of goods sold: Beginning inventory YEAR 1 YEAR 2 $ 500,000 $750,000 0 85,000 Add: Cost of goods manufactured (at $17 per unit) 425,000 425,000 Goods available for sale 425,000 510,000 Less: ending inventory (at $17 per unit) 85,000 0 Cost of goods sold 340,000 510,000 Gross Margin 160,000 240,000|| **Selling and administrative expenses 155,000 170,000 Net operating Income $5,000 $ 70,000 ** Selling & Administrative expenses - $1.50 per unit is variable; $125,000 fixed each year The company's unit product cost is computed as follows: Direct Materials Direct Labor Variable factory overhead Variable selling & administrative Unit product cost $4 5 $ 17 Production and cost data for the two years are given below: Year 1 Year 2 Unit produced 25,000 25,000 Units sold 20,000 30,000 Required: a) Prepare a variable costing income statement for each year in the contribution format. b) (4.5marks) Reconcile the absorption costing and variable costing net operating income figures for each year