Sherwood Corporation has provided the following data for its two most recent years of operation:

Selling price per unit

$ $61$

Manufacturing costs:

Variable manufacturing cost per unit produced:

Direct materials

$ $13$

Direct labor

$ $6$

Variable manufacturing overhead

$ $4$

Fixed manufacturing overhead per year

$ $96,000$

Selling and administrative expenses:

Variable selling and administrative expense per unit sold

$ $5$

Fixed selling and administrative expense per year

$ $65,000$

Year $1$

Year $2$

Units in beginning inventory

$0$

$2,000$

Units produced during the year

$8,000$

$6,000$

Units sold during the year

$6,000$

$5,000$

Units in ending inventory

$2,000$

$3,000$

Required:

a$.$ Assume the company uses absorption costing. Compute the unit product cost in each year.

b$.$ Assume the company uses variable costing. Compute the unit product cost in each year.

c$.$ Assume the company uses absorption costing. Prepare an income statement for each year.

d$.$ Assume the company uses variable costing. Prepare an income statement for each year.

e$.$ Prepare a report in good form reconciling the variable costing and absorption costing net incomes.