Seeb LLC manufactures and sells a unique machine part. The firm's plant is highly automated with low variable and high fixed manufacturing costs. Operating results on an absorption costing basis were as follows: 2016 2017 2017 2018 <............. ..............> 704 528 704 330 530 184 198 174 180 160 180 38 Sales Cost of Goods Sold Gross Margin Selling & Administrative Expenses Net Operating Income (Loss) 520 16) Additional information about the company is as follows: 1) Total variable manufacturing costs (DL, DMs, and variable manufacturing overhead) per unit is OMR3; 2) Fixed manufacturing overhead costs total OMR400,000 3) Fixed manufacturing costs are applied to units of product on the basis of the number of units produced each year (i.e., a new fixed manufacturing overhead rate is computed each year). 4) The company uses a FIFO inventory flow assumption. 5) Variable selling and administrative expenses are OMR2 per unit sold. 6) Fixed selling and administrative expenses total OMR100,000. Production and sales information for the three years are given below: (units '000) Production (units) Sales (units) 2016 40 40 2017 50 2018 32 40 30 (i) Prepare the Income Statement using appropriate format to compute the net operating income for each year under the variable costing approach. (ii) Explain why net operating income was higher in 2017 than in 2016 under absorption costing, in light of the fact that fewer units were sold in 2017 than in Year 2016. (ii) Explain why the company suffered a loss in 2018 but reported a profit in 2016, although the same number of units was sold in each year. (iv) Do you AGREE that absorption costing induces more unethical financial reporting practices than variable costing? EXPLAIN with appropriate examples