Audiophonics Limited manufactures and sells high$-$quality and durable ear buds for use with personal electronics that are custom moulded to each customer$$s ear. Cost data for the product follow:

Variable costs per unit:

Direct materials $ $10$

Direct labour $18$

Variable factory overhead $10$

Variable selling and administrative $5$

Total variable costs per unit $ $43$

Fixed costs per month:

Fixed manufacturing overhead $ $169,400$

Fixed selling and administrative $154,000$

Total fixed cost per month $ $323,400$

The product sells for $$66$ per unit. Production and sales data for May and June, the first two months of operations, are as follows:

Units Produced Units Sold

May $15,40013,200$

June $15,40017,600$

Income statements prepared by the Accounting Department using absorption costing are presented below:

May June

Sales $ $871,200$ $ $1,161,600$

Cost of goods sold:

Beginning inventory $0107,800$

Add cost of goods manufactured $754,600754,600$

Goods available for sale $754,600862,400$

Less ending inventory $107,8000$

Cost of goods sold $646,800862,400$

Gross margin $224,400299,200$

Selling and administrative expenses $220,000242,000$

Operating income $ $4,400$ $ $57,200$

Required:

$1.$ Determine the unit product cost under each of the following methods.

$2.$ Prepare variable costing income statements for May and June using the contribution approach. $($Do not leave any empty spaces; input a $0$ wherever it is required.$)$

$3.$ Reconcile the variable costing and absorption costing operating income figures. $($Loss amounts should be indicated with a minus sign.$)$

$4.$ This part of the question is not part of your Connect assignment.