Max, Inc., has just organized a new division to manufacture and sell specially designed tables using select hardwoods for personal computers. The divisions monthly costs are shown in the schedule below: Manufacturing costs: Variable costs per unit: Direct materials $95 Variable manufacturing overhead $5 Fixed manufacturing overhead costs $500,000 Selling and administrative costs: Variable 20% of sales Fixed $600,000 Max regards all of its workers as full-time employees and the company has a long-standing no-layoff policy. Furthermore, production is highly automated. Accordingly, the company includes its labor costs in its fixed manufacturing overhead. The tables sell for $300 each. During the first month of operations, the following activity was recorded: Units produced 4,000 Units sold 3,200 Required: a) Determine the unit product cost under each of the following: Variable costing. Absorption costing. b) Prepare an income statement for the month using variable costing. c) Prepare an income statement for the month using absorption costing. d) Explain the difference in operating income for the two costing systems