Question 1 (15 marks) Boxes Company sells cardboard boxes for packing and moving. The operating costs for the past year were as follows: Variable costs per unit: Direct materials: $0.50 Direct labour: $0.20 Variable overhead: $0.30 Variable selling: $0.10 Fixed costs for the year: Fixed overhead for 500,000 units produced $250,000 Selling and administrative expenses $60,000 During the year, Boxes Company produced 500,000 cardboard boxes and sold 495,000 at $5 each. Boxes Company had 5,000 cardboard boxes in beginning finished goods inventory. Required: 1. Calculate the per unit cost of a cardboard box using absorption costing. 2. How many units are in ending inventory and what is the value of ending inventory under absorption costing? 3. Prepare an income statement using absorption costing. 4. Calculate the per unit cost of the cardboard box using variable costing. 5. Why does the per unit cost of the cardboard box under variable costing differ from the per unit cost under absorption costing? Provide detailed explanations. 6. Prepare an income statement using variable costing. (2.5+2+2.5+ 2 + 2.5+ 3.5 = 15 marks)