Question 1 (24 marks) A manufacturing company that produces a single product has provided the following data related to its operations during 2021: Manufacturing costs Direct materials $70.00 Direct labor $16.00 Variable manufacturing overhead $5.00 Fixed manufacturing overhead per year $450,000 Selling and administrative costs Variable cost per unit Total fixed cost $7.50 $600,000 The product sells for $138 per unit. The company produced 25,000 units and sold 30,000 units in 2021. There is a beginning inventory of 50,000 units. The company had the same amount of fixed manufacturing overhead in 2020 and the units produced were also 25,000 units. Required: a) Determine the unit product cost under: i. Absorption costing. ii. Variable costing. (4 marks) b) Prepare an income statement for the year ended 31 December 2021 using absorption costing. (6 marks) c) Prepare a contribution format income statement for the year 31 December 2021 using variable costing. (6 marks) d) The manager is puzzled why the net income on the absorption costing income statement is so different from that on the variable costing statement. Explain to him in your words supported with the cost reconciliation. (4 marks) Given average operating assets of $500,000,000 and minimum required rate of return 20%. Compute the company's retum on investment and residual income using the income statement prepared in (c). (4 marks)