9. Liwa Plastic company's first two years of operations, the company reported absorption costing net operating income as follows: 0 YEAR I YEAR 2 Sales (at S25 per unit) $ 500,000 $750,000 Less: Cost of goods sold: Beginning inventory 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 Cost of goods sold 340,000 $10,000 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 7 Unit product cost $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. (4.5marks) b) Reconcile the absorption costing and variable costing net operating income figures for each year. (1 mark)