AB Company produces and sells a single product, a wooden hand loom for weaving small items such as scarves. Selected cost and operating data relating to the product for two years are given below:

Selling price per unit Tk. 75

Manufacturing costs: Variable per unit produced: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead per year Selling and administrative expenses: Variable per unit sold Fixed per year Tk. 12 . Tk. 5 Tk. 7 Tk. 150.000 Tk. 1 Tk. 60,000 Year 1 Units in beginning inventory 0 Units produced during the year 15.000 Units sold during the year 12,000 Required: 1. Assume the company uses absorption costing. a. Compute the unit product cost in each year. b. Prepare an income statement for each vear. 2. Assume the company uses variable costing. a. Compute the unit product cost in each year. b. Prepare an income statement for each year. 3. Reconcile the variable costing and absorption costing net operating incomes. Year 2 3000 9000 12.000