ReplenAde produced 18,000 cases of powdered drink mix and sold 15,000 cases in April 2018. The sales price was $28, variable costs were $11 per case ($8 manufacturing and $3 selling and administrative), and total fixed costs were $90,000 ($72,000 manufacturing overhead and $18,000 selling and administrative). The company had no beginning Finished Goods Inventory. The company had the following results using variable costing: (Click the icon to view the data using variable costing.) Read the requirements. Requirement 1. Prepare the April income statement using absorption costing. Income Statement (Absorption Costing) ReplenAde Month Ended April 30, 2018 Reference - X Net Sales Revenue 420000 Variable Costing Variable Cost of Goods Sold 120000 Total product cost per unit $ Variable Selling and Administrative Costs 45000 Contribution Margin 165000 255000 Cost of Finished Goods Inventory as of April 30, 2018 $ 8.00 24,000 Fixed Costs: Fixed Cost of Goods Sold Fixed Selling and Administrative Costs Operating Income 72000 18000 90000 165000 Requirement 2. Determine the product cost per unit and the total cost of the 3,000 cases in Finished Goods Inventory as of April 30. The cost per unit is and the total cost of the 3,000 cases in Finished Goods Inventory as of April 30 is Print Done Requirement 3. Is the April 30 balance in Finished Goods Inventory higher or lower than variable costing? Explain why. OA. The finished goods inventory under the absorption costing method is lower than under the variable costing method. The primary reason for this is that with variable costing, some manufacturing fixed costs are still in Finished Goods Inventory on the balance sheet and have not been expensed. OB. The finished goods inventory under the absorption costing method is higher than under the variable costing method. The primary reason for this is that the unit cost is higher under absorption costing because fixed manufacturing costs are absorbed by the entire production run and not expensed as a period cost, as they would be under the variable costing method. OC. The finished goods inventory under the absorption costing method is higher than under the variable costing method. The primary reason for this is that the absorption costing method considers selling and administrative costs to be product costs, and the variable costing method considers them period costs. OD. The finished goods inventory under the absorption costing method is lower than under the variable costing method. The primary reason for this is that the unit cost is higher under variable costing because fixed manufacturing costs are considered a product cost and are not expensed as a period cost, as they would be under the absorption costing method