Problem 2 (10 points total) cost structure for Chiang Company, which began operations on January 1, is provided below: Direct materials Direct labor Manufacturing overhead S18 per unit $14 per unit $8 per unit $20.000 (55.00 per unit) 3,500 12.000 Variable Fixed Variable selling and admin Fixed selling and admin. Variable selling and administrative costs are $4 per unit solod. During the year, the company produced 4,000 units and sold 3,500 units at the $60 selling price. Required: 1) Prepare an income statement under absorption costing. 2) Prepare an income statement under variable costing. 3) Explain the difference between the two income amounts 1) Income statement under absorption costing: Sales Cost of goods sold Beginming imventory V aniable and fixed manufacturing costs Cost of goods available for sale Less ending imventory Ciross margm l ess operating costs V aniable seling and adninistrative costs F pued selling and adinunistrative costs