Home-MacEwan Un. D MacEwan Single Sig-O Blackboard Learn D EasyWeb-Login to LEANDER OFFICE PRODUCTS INC Income Statement $314,400 Sales (52,400 units) Variable expenses: Variable cost of goods sold Variable selling and administrative expenses $143,578 58,688 202,264 Contribution margin Fixed expenses: 112,136 Fixed manufacturing overhead Fixed selling and administrative expenses 103,360 23,056 126,416 Operating loss (14,280) 'Consists of direct materials, direct labour, and variable manufacturing overhead Leander is discouraged over the loss shown for the month, particularly since she had planned to use the statement to encourage investors to purchase stock in the new company. A friend who is an accountant insists that the company should be using absorption costing rather than variable costing. He argues that if absorption costing had been used, the company would probably have reported a profit for the month. Selected cost data relating to the product and to the first month of operations follow: Units produced Units sold 64,600 52,400 Variable osts per unit Direct materials Direct labour Variable manufacturing overhead S 1.37 $ 0.97 $ 0.40 Variable selling and administrative expenses 1.12 Cete the following a. Compute the unit product cost under absorption costing. (Round your answer to 2 decimal places.) 2.74 b. Redo the company's income statement for the month using absorption costing Cost of goods sold