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Absorption and Variable Costing with Over- and Underapplied Overhead Flaherty, Inc., has just completed its first year of operations. The unit costs on a normal costing basis are as follows: During the year, the company had the following activity: the predetermined overhead rates. Any overhead variances are closed to Cost of Goods Sold. Required: 1. Compute the unit cost using (a) absorption costing and (b) variable costing. 2. Prepare an absorption-costing income statement. Round your answers to the nearest cent. 3. Prepare a variable-costing income statement. Round your answers to the nearest cent. 4. Reconcile the difference between the two income statements. The absorption costing generates an income $ than variable costing