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 $ 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 15,400 13,200 June 15,400 17,600 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 0 107,800 Add cost of goods manufactured 754,600 754,600 Goods available for sale 754,600 862,400 Less ending inventory 107,800 0 Cost of goods sold 646,800 862,400 Gross margin 224,400 299,200 Selling and administrative expenses 220,000 242,000 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.)