Prior to the first month of operations ending April 30, Lisa Corp estimated the following operating results: Sales (50,000 units) Manufacturing costs (50,000 units) Direct materials Direct labor Variable factory overhead Fixed factory overhead Fixed selling and administrative expenses Variable selling and administrative expenses $ 5,000,000 1,800,000 600,000 300,000 150,000 100,000 250,000 The company is evaluating a proposal to manufacture 60,000 units instead of 50,000 units, thus creating an ending inventory of 10,000 units. Manufacturing the additional units will not change sales, unit variable factory overhead costs, total fixed factory overhead cost, or total selling and administrative expenses. a. Prepare an estimated incomes statement, comparing operating results if 50,000 and 60,000 units are manufactured in (1) the absorption costing format and (2) the variable costing format. b. Compute the Balance Sheet amounts for Ending Finished Goods (assuming 60,000 units are produced) under (1) absorption costing and (2) variable costing. c. Clearly explain the reason for the difference in income from operations reported for the two levels of production by the absorption costing income statement.