QI. High Tech Solutions Inc. produces and sells many programmable chips products. The company has just developed a new chip related to GPS system to be marketed throughout the UAE. The following cost and revenue data relate to October 2019, the first month of the operation: Beginning inventory 0 Units produced 20,000 Units sold 16,000 Selling price per unit. $150 Selling and administrative expenses: Variable per unit $12 Fixed (per month) $400,000 Manufacturing costs: Direct materials cost per unit $40 Direct labor cost per unit $16 Variable manufacturing overhead cost per unit $4 Fixed manufacturing overhead cost (per month) $200,000 Management is anxious to see how profitable the new chip will be and has asked that an income statement be prepared for October 2019 Required: 1. Assume that the company uses absorption costing. 1. Determine the unit product cost. 2. Prepare an income statement for May 2. Assume that the company uses variable costing 1. Determine the unit product cost. 2. Prepare a contribution format income statement for May 3. Explain the reason for any difference in the ending inventory balances under the two costing methods and the impact of this difference on reported net operating income