Audiophonics Limited manufactures and sells high-quality and durable ear buds for use with personal electronics that are custom moulded to each customer's eat Cost data for the product follow. Variable costs per unit: Direct materials Direct labour Variable factory overhead Variable selling and administrative Total variable costs per unit 19 7 3 36 Fixed costs per month Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month $167,400 138,280 $297,600 The product sells for $54 per unit. Production and sales data for May and June, the first two months of operations, are as follows: Units Produced 18,600 18,600 May June Units Sold 14,800 22,400 Income statements prepared by the Accounting Department using absorption costing are presented below: June $ 799,200 $1,209,600 Sales 159,600 781,200 781,200 Cost of goods sold: Beginning inventory Add cost of goods manufactured Goods available for sale Less ending inventory 940,800 781,200 159,600 621,600 940,800 Cost of goods sold 177,600 174,600 263,800 197.400 Gross margin Selling and administrative expenses Operating income $ 3,000 $ 71,400 Prov PE Next Required: 1. Determine the unit product cost under each of the following methods. a. Absorption costing Variable costing 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.) May June Variable expenses Variable cost of goods sold Total variable expenses Fbced expenses Total foed expenses Operating income (loss 3. Reconcile the variable costing and absorption costing operating income figures. (Loss amounts should be indicated with a minus sign.) May June Variable costing operating income (loss) Add: Fixed manufacturing overhead cost deferred in inventory under absorption costing Deduct Fixed manufacturing overhead cost released from inventory under absorption costing Absorption costing operating income