O3. The Miller Company had the following results for its first two years of operation Sales Cost of goods sold Gross margin Selling and administrative expens Operating income Year 1 S1,200,000 800.000 400,000 300,000 Year 2 $1,200,000 800,000 400,000 300,000 $100,000 $100,000 in Year I, the company produced and sold 40,000 units of its only product: n Year 2, the company again sold 40,000 units, but increased production to 50,000 units. The company's variable production cost is S5 per unit, and its fixed manufacturing overhead cost is S600,000 a year. Fixed manufacturing overhead costs are applied to the product on the basis of each year's unit production (i.e., a new fixed overhead rate is computed each year). Variable selling and administrative expenses are $2 per unit sold Required: a) Compute the unit product cost for each year under absorption costing and under variable costing b) Prepare an income statement for each year, using the contribution format with variable costing c) Reconcile the variable costing and absorption costing income figures for each year