Answer Please!

Variable Costing Can Still Create Incentives to Over Produce Cope Products uses a flexible budget to set the overhead rate at the beginning of the year based on units produced. In year 1 budgeted fixed overhead is $1 million and budgeted variable overhead is $2 per unit. Direct material and direct labor together are $5 per unit. Cope sells the completed product for $30. There is no beginning inventory. Budgeted volume is 80,000 units. Production and sales are 80,000 units. Actual overhead incurred in year 1 is $1,160,000. Any under-or over-absorbed overhead is written off to cost of goods sold. In year 2 , budgeted volume and production are again both 80,000 units. However, only 60,000 units are sold. Budgeted fixed overhead is $1 million and budgeted variable overhead is $2 per unit. Direct material and direct labor are $5 per unit. Final selling price remains at $30 per unit. Actual overhead incurred in year 2 is $1.35 million. Required: a. Calculate net income in year 1 first using absorption costing and then using variable costing. Explain any difference between the two net income numbers. b. Calculate net income in year 2 using absorption costing. where the overhead rate used to assign overhead to products is based on actual overhead incurred. c. Calculate net income in year 2 using variable costing, where any difference between budgeted overhead and actual overhead is treated as a fixed cost. d. Calculate net income in year 2 using variable costing, where any difference between budgeted overhead and actual overhead is treated as a variable cost. e. Explain why your answers in parts (b). (c), and (d) differ