Encanto has organized a new division to manufacture and sell specially floors. The division's monthly costs are shown in the schedule below: Encanto Inc. Manufacturing costs: Variable costs per unit: Direct materials $ 31 $ 16 Variable manufacturing overhead Fixed manufacturing overhead costs (total) Selling and administrative costs: $ 215,000 Variable (percentage of sales) 12% Fixed (total) $ 144,000 Encanto regards all of its workers as full-time employees, and the company has a long standing no lay off policy. Furthermore, production is highly automated. Accordingly, the company includes its labour costs in its fixed manufacturing overhead. The floors sell boxes of 20 square feet for $212 per box. During the first month of operations, the following activity was recorded: Activity: Boxes produced 4,000 Boxes sold 3,700 Selling price per box $ 212 A) Compute the unit product cost under (i) absorption costing (3 marks) (ii) variable costing (3 marks) B) Prepare an income statement for the month using absorption costing. (7 marks) C) Prepare an income statement for the month using variable costing. (7 marks) D) Reconcile the difference between the absorption costing and variable costing income statements