Reunion Enterprises produces a video streaming device for homes. The company data for the first two years of operation follows:

Variable costs per unit:

Manufacturing:

Direct Materials: $25

Direct Labor: $13

Variable Manufacturing Overhead: $3

Variable Selling and administrative: $2

Fixed costs per year:

Fixed manufacturing overhead: $240,000

Fixed selling and administrative expenses: $60,000

During its first year of operations, Reunion produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the companys product is $88 per unit.

1A) Assume the company uses variable costing and compute the unit costs for year 1 and year 2.

1B) Prepare an income statement for year 1 and year 2

1C) Assume the company uses absorption costing and compute the unit product cost for year 1 and year 2

1D: Prepare an income statement for year 1 and year 2 through absorption costing and reconcicle the difference between variable costing and absorption costing net operating income in Year