Comparative income statements-variable and absorption costing Fighlands Manufacturing Company has determined the cost of manufacturing a unit of product to be as follows, based on normal production of 50,000 units per year $10 Direet materials Direat labor Variable factory overbead $24 Fixed factory overhcad... Operating statistics for the months of July and August are as follows: Units produced Units sold. July August 6,000 4,000 4,000 6,000 Selling and administrative expenses h selling price is S40 per unit There were no iventories on July 1, and there is no work in proceis st August 31. Instructions: Complete the comparative income statements on the next page for July and August for Hlighlands under 1. Absorption costing 2. Variable costing Highlands Manufacturing Company Income Statement For the Month Ended July 31,20x Absorption Variable Costing Cost of goods sold Gross margin Manufacturing margin Fixed factory overbead Selling and administrative expenses Net income (loss).. Calculation of overapplied factory overhead Fixed factory overhead per year Fixed factory overhead per month... Fixed factory overhead applied to production Fixed overhead per month Fixed factory overbcad overapplied. Income Statement For the Month Ended August 31, 20ax Absorption ariable Costing Costing Cost of goods sold Underapplied/overapplied factory overhea Gross margin.. Manufacturing margin Less: Fixed factory overhead Selling and administrative expenses Net income lass. **Calculation of underapplied factory overhead Fixed factory overhead applied to production.. s Fixed factory overhead per month Fixed factory overhead underapplid_