1. Johnson Controls compares variable and absorption costing: Production 50,000 units, Direct materials $10/unit, Direct labor $8/unit, Variable overhead $4/unit, Fixed overhead $200,000.
   • Requirements:
     • Calculate the cost per unit under variable costing and absorption costing.
     • Prepare income statements using both costing methods.
     • Analyze the impact of production levels on reported profits.
     • Discuss the implications of each costing method for decision-making.