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: The product sells for $80 per unit. Production and sales data for May and June, the first two months of operations, are as follows: Income statements prepared by the Accounting Department using absorption costing are presented below; Required 1. Determine the unit product cost under a. Absorption costing b. Variable costing 2. Prepare variable costing income statements for May and June using the contribution approuch. 3. Recoecile the variable costing and absorption costing operating income figures. 4. The company's Accounting Department has determined the breakeven point to be 14,000 units per month, computed as follows: UnitcontributionmarginFixedcoulpermonth=$30perunit$420,000=14,000units On receiving this figure, the presidemt eommented, "There's something peculiar here. The controller says that the break-even point is 14,000 units per month. Yet we sold only 13,000 units in May, and the income statement we received showed a \$2,000 profit. Which figure do we believe?" Prepare a brief explanation of what happened on the May income statement. 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: The product sells for $80 per unit. Production and sales data for May and June, the first two months of operations, are as follows: Income statements prepared by the Accounting Department using absorption costing are presented below; Required 1. Determine the unit product cost under a. Absorption costing b. Variable costing 2. Prepare variable costing income statements for May and June using the contribution approuch. 3. Recoecile the variable costing and absorption costing operating income figures. 4. The company's Accounting Department has determined the breakeven point to be 14,000 units per month, computed as follows: UnitcontributionmarginFixedcoulpermonth=$30perunit$420,000=14,000units On receiving this figure, the presidemt eommented, "There's something peculiar here. The controller says that the break-even point is 14,000 units per month. Yet we sold only 13,000 units in May, and the income statement we received showed a \$2,000 profit. Which figure do we believe?" Prepare a brief explanation of what happened on the May income statement