Question 2: Variable Costing (10 marks) The MM Company produces and sells one product, a low cost TV. The following data refer to the year just completed: Beginning Inventory 0 Units Produced 25,000 Units Sold 20,000 Sales Price per unit $400 Selling & Admin: Variable SG+A $15/unit Fixed SG+A $275,000 per year Manufacturing Costs: Direct Material $200/unit Direct Labour $50/unit VOH $30/unit FOH 300,000 Required: a) (4 marks) Compute the cost of a single unit of product under both the absorption costing and variable costing approaches. b) (3 marks) Prepare an income statement for the year using absorption costing. c) (3 marks) Reconcile the variable costing and absorption costing operating incomes for the year