Operating data for Siesta Company and its absorption costing income statements for the last two years are presented below: Units in beginning inventory Units produced Units sold Year 1 2,000 14,000 15,000 Year 2 1,000 14,000 12,000 $ 240,000 $ 320,000 Sales Cost of Goods Sold Beginning inventory Add: Cost of Goods Manufactured Goods available for sale Less: Ending inventory Cost of Goods Sold Gross margin Selling and administrative expenses Operating income 23,023 161,160 184,183 11,511 172,671 67,329 89,000 (21,671) $ 11,511 161,160 172,671 34,534 138,137 181,863 81,200 100,663 $ Fixed manufacturing overhead Direct material per unit Direct labour per unit Variable Manufacturing overhead per unit Variable Selling & Admin costs per unit $ $ $ . . 61,900 $ 2.00 $ 3.00 $ 2.09 $ 2.60 $ 61,900 2.00 3.00 2.09 2.60 $ Required: a) What was the unit product cost in each year under variable costing Year 1 Year 2 Total unit product cost b) Prepare new income statements for each year using variable costing. Siesta Company Variable Costing Income Statement Year 1 Year 2 Sales Less: Variable expenses Contribution margin Operating income (loss) c) Reconcile the difference in Operating Income between variable costing and absorption costing Variable costing operating income Absorption costing operating income