Audiophonics Limited manufactures and sells high-quality and durable ear buds for use with personal electronics that are custom moulded to each customers ear. Cost data for the product follow: Variable costs per unit: Direct materials $ 12 Direct labour 24 Variable factory overhead 8 Variable selling and administrative 6 Total variable costs per unit $ 50 Fixed costs per month: Fixed manufacturing overhead $ 240,000 Fixed selling and administrative 180,000 Total fixed costs per month $ 420,000 The product sells for $80 per unit. Production and sales data for May and June, the first two months of operations, are as follows: Units Produced Units Sold May 15,000 13,000 June 15,000 17,000 Income statements prepared by the Accounting Department using absorption costing are presented below: May June Sales $ 1,040,000 $ 1,360,000 Cost of goods sold: Beginning inventory 0 120,000 Add cost of goods manufactured 900,000 900,000 Goods available for sale 900,000 1,020,000 Less ending inventory 120,000 0 Cost of goods sold 780,000 1,020,000 Gross margin 260,000 340,000 Selling and administrative expenses 258,000 282,000 Operating income $ 2,000 $ 58,000 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.)