Question 2 Sister's Company manufactures and sells one product. The following information pertains to each of the company's first three years of operations: Variable costs per unit: Manufacturing: Direct Materials Direct Labor Variable manufacturing overhead Variable Selling and Administrative Fixed costs per year: Fixed manufacturing overhead $820,000 Fixed selling and administrative expenses $300,000 Selling price of the company's product is S60 per unit. Year 1 Year 2 5000 Units in beginning Inventory Units produced during the year 65,000 55,000 60,000 Units sold during the year 60,000 5000 Units in ending inventory Required: 1. Assume the company uses absorption costing: a. Compute the unit product cost for Year 1, 2&3. b. Prepare an income statement for Year 1, 2 and 3. 2. Assume the company uses Variable costing c. Compute the unit product cost for Year 1, 2&3. d. Prepare an income statement for Year 1, 2 and 3