P2. Coyote Company produces a single product, and the following information pertains to its operations over the three years from 2020 to 2022: Variable costs per unit: Direct materials Direct labor $5 $ 6 $ 13 Selling & administrative expenses $ 6 Variable mfg. overhead Fixed costs per year: Manufacturing overhead Selling & administrative expenses $240,000 $300,000 In 2020, Coyote produced 40,000 units and sold 40,000 units. In 2021, it produced 60,000 units and sold 50,000 units. In 2022, it produced 50,000 units and sold 60,000 units. The selling price of the company's product is $60 per unit. Instruction: 1. Prepare income statements of Coyote Company for 2020, 2021, and 2022 using a. Variable costing. b. Absorption costing. 2. Compare the net incomes under variable costing with those under absorption costing for the three years. Explain the causes of differences in the net incomes for those three years between variable costing and absorption costing