Hardwick Manufacturing manufactures a single product that it will sell for $85 per unit. The company is looking to project its operating income for its first two years of operations. Cost information for the single unit of its product is as follows: (Click the icon to view the data.) During its first year of operations, the company plans to manufacture 21,000 units and anticipates selling 16,000 of those units. During the second year of its operations, the company plans to manufacture 21,000 units and anticipates selling 23,000 units (it has units in beginning inventory for the second year from its first year of operations). Read the requirements. Requirement 1. Prepare an absorption costing income statement for (a) the first year of operations and (b) the second year of operations. Hardwick Manufacturing Income Statement (Absorption Costing) (a) Year 1 (b) Year 2 Less: Less: Requirement 2. Before you prepare the variable costing income statements for Hardwick, predict the company's operating income using variable costing for both its first year and its second year without preparing the variable costing income statements. Hint: Calculate the variable costing operating income for a given year by taking that year's absorption costing operating income and adding or subtracting the difference in operating income as calculated using the following formula: Difference in operating income = (Change in inventory level in units x Fixed MOH per unit). Begin by calculating the difference in income each year using the formula provided. Change in inventory level in units Fixed MOH per unit Difference in operating income Year = 2 Now predict Hardwick's operating income under variable costing for both its first year and its second year of operations. Operating income under variable costing Year 2 Requirement 3. Prepare a variable costing income statement for (a) the first year of operations and (b) the second year of operations. Hardwick Manufacturing Contribution Margin Income Statement (Variable Costing) (a) Year 1 (b) Year 2 Less: Less: * More Info - X Direct material per unit produced $39 Direct labor cost per unit produced $12 Variable manufacturing overhead (MOH) per unit produced $9 Variable operating expenses per unit sold $2 Fixed manufacturing overhead (MOH) for each year is $210,000, while fixed operating expenses for each year will be $82,000. Requirements 1. Prepare an absorption costing income statement for the following: a. The first year of operations b. The second year of operations 2. Before you prepare the variable costing income statements for Hardwick, predict the company's operating income using variable costing for both its first year and its second year without preparing the variable costing income statements. Hint: Calculate the variable costing operating income for a given year by taking that year's absorption costing operating income an adding or subtracting the difference in operating income as calculated using the following formula: Difference in operating income = (Change in inventory level in units x Fixed MOH per unit) 3. Prepare a variable costing income statement for each of the following years: a. The first year of operations b. The second year of operations