Q4. (25 marka) - Absorption and Variable Costing HOLOLOLA Company manufactures and sells a single product. The following costs were incurred the company's first year of operations: Variable costs per unit: Manufacturing Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expense $35 22 5 6 247,000 130,000 During the year, the company produced 26,000 units and sold 25,000 units. The selling price of company's product is $91 per unit. Required: 1. Assume that the company uses absorption costing. a. Compute the unit product cost. (3 marks) b. Prepare an income statement for the year. (7 marks)