CRCICIOS Problem A: Costner Company uses an absorption costing system in accounting for the single product it manufactures. The following selected data are for the year: 25 points Sales (10,000 units) $360,000 Direct materials (variable) S129,600 Direct labor (variable) $43,200 Variable manufacturing overhead $12,960 Fixed manufacturing overhead $17,280 Variable selling and administrative expenses $21,600 Fixed selling and administrative expenses $72,000 The company produced 12,000 units and sold 10,000 units. Problem A Part 1: Calculate production costs per unit under variable and absorption costing. Cost per Unit: Variable Absorption 10.80 $ 10.80 $ $ 129,600 12,000 units produced (first one done for you) Direct Materials Direct Labor Variable OH Feed OH Total Production Costs per unit Part 2: Prepare a contribution margin income statement under Variable costing, Costner Company Variable Costing Income Statement For Year Ended December 31 Sales Less: Variable Costs Production Cost Selling and Admin (Hint: This number should be Total Variable Costs.) Sales - Variable Costs Contribution Margin Less: Fixed Costs Fixed Overhead Fixed Selling & Admin Net Income (Hint: This number should be Total Fixed Costs) Contribution Margin Fixed Costs Part 3: Prepare a multi-step Income statement under absorption costing Costner Company Absorption Costing Income Statement For Year Ended December 31 Sales - COGS Sales Less: Cost of Goods Sold Production Cost Gross Profit Operating Expenses Variable Selling and Admin Fixed Selling and Admin Total Expenses Net Income (Hint: This number should be Total Operating Expenses) COGS - Total Expenses Part 4: Explain the reason for the difference in net income between Part 2 (Variable) and Part 3 (Absorption). Explaination: (Part 4 is only worth 1 point total so just do the best you can here. I'm just looking for a decent effort.) Fixed Overhead Fixed OH applied Difference Income under Absorption Income under Variable Difference These two should agree