Leander Office Products Inc. produces and sells small storage and organizational products for office use. During the first month of operations, the products sold well. Andrea Leander, the owner of the company, was surprised to see a loss for the month on her income statement. This statement was prepared by a local bookkeeping service recommended to her by her bank manager. The statement follows: LEANDER OFFICE PRODUCTS INC. Income Statement Sales (53,400 units) $336,420 Variable expenses: Variable cost of goods sold* $145, 248 Variable selling and administrative expenses 65,682 210,930 Contribution margin 125,490 Fixed expenses: Fixed manufacturing overhead 119,306 Fixed selling and administrative expenses 19, 224 138,530 Operating loss $(13, 040) *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: 63,800 53,400 uced osts per unit: naterials Labour e manufacturing overhead e selling and administrative expenses $ 1.44 $ 1.05 $ 0.23 $ 1.23 he following: e unit product cost under absorption costing. (Round your answer to 2 decimal places.) st b. Redo the company's income statement for the month using absorption costing. (Do not leave any empty spaces; input a O wherever it is required.) Cost of goods sold: iable and absorption costing operating income (loss) figures. (Loss amounts should be ente ting income (loss) ing overhead cost deferred in inventory under absorption erating income (loss) Connect d month of operations, the company again produced 63,800 units but sold 74,200 units. (A: a. Prepare a contribution format income statement for the month using variable costing. Variable expenses: Fixed expenses: b. Prepare an income statement for the month using absorption costing. (Do not leave any empty spaces; input a 0 wherever it is required.) Cost of goods sold: c. Reconcile the variable costing and absorption costing operating income figures. Variable costing operating income (loss) Deduct: Fixed manufacturing overhead cost released from inventory under absorption costing Absorption costing operating income (loss)