O-Mach, Inc., planned and actually manufactured 200,000 units of its single product in 2017, its first year of operation. Variable manufacturing costs were $12 per unit for direct materials, $7 per unit for direct labor, and $4 per unit for variable manufacturing overhead. Variable administrative costs were $10 per unit sold. Fixed manufacturing costs total $600,000 and fixed administrative costs total $400,000 in 2016. O-Mach sold 120,000 units of product in 2017 at a selling price of $40 Required: 1. Unit product cost using absorption costing is 2. Unit product cost using variable costing is 3. Prepare the income statement using absorption costing. 4. Prepare the income statement using variable costing. per unit. 5. What is the logic behind the treatment of fixed manufacturing overhead under variable costing? 6. How is the 2018 beginning inventory impacted as a result of using absorption or variable costing? 7. If all 200,000 units were sold during year one, which method would report higher net income? Absorption or Variable costing? (explain your answer) 8. Is Absorption and/or variable costing GAAP? What is the logic behind your answer?