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 Direct labour Variable factory overhead Variable selling and administrative 12 5 Total variable costs per unit $ 42 Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative $162,000 145,800 Total fixed cost per month $307,800 The product sells for $64 per unit. Production and sales data for May and June, the first two months of operations are as follows. Units Produced 16,200 16,200 May June Units Sold 13,609 18,880 Income statements prepared by the Accounting Department using absorption costing are presented below. Income statements prepared by the Accounting Department using absorption costing are presented below. May Sales $ 870,400 June $1,203,280 Cost of goods sold: Beginning inventory Add cost of goods manufactured 122,200 @ 761,400 Goods available for sale Less ending inventory 761,400 122,200 883,600 Cost of goods sold 639,209 883,600 Gross margin Selling and administrative expenses 231, 200 213,800 319,689 239,800 Operating income $ 17,400 $ 79, 880 Required: 1. Determine the unit product cost under each of the following methods. a. Absorption costing b. Variable costing 2. Prepare variable costing income statements for May and June using the contribution approach. (Do not leave any empty spaces, input a O wherever it is required.) May June Variable expenses: Variable cost of goods sold: Total variable expenses Fixed expenses 0 Total fuced expenses Operating Income (loss) S 0 S 0 3. Reconcile the variable costing and absorption costing operating income figures (Loss amounts should be indicated with a minus sign.) Variable costing operating income (loss) Add: Fixed manufacturing overhead cost deferred in inventory under absorption costing Deduct: Fbxed manufacturing overhead cost released from inventory under absorption costing Absorption costing operating income $ 0