Stark Enterprises manufactures and sells a single product. The following costs were incurred during the company's first year of operations Variable costs per units Manufacturing Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative Fixed costs per year Fixed manufacturing overhead med selling and administrative expense 5 278,000 113,000 During the year, the company produced 27,800 units and sold 22,600 units. The selling price of the company's product is $90 per unit. Required: 1. Assume that the company uses absorption costing a. Compute the unit product cost Unipood cost b. Prepare an income statement for the year. (Do not leave any empty spaces; input a 0 wherever it is required.) Absorption Costing Income Statement Cost of goods sold 0 0 0 $ 0 c. If 2,000 more units were produced during the year, the operating income would: Increase O Remain the same Decrease 2. Assume that the company uses variable costing, a. Compute the unit product cost. Unit product cost . b. Prepare an income statement for the year. (Do not leave any empty spaces; input a 0 wherever it is required.) Variable Costing Income Statement Variable expenses Variable cost of goods sold Variable cost of goods sold 0 0 0 Fored expenses 0 0 10 c. If 2,000 more units were produced during the year, the operating income would: Increase O Remain the same O Decrease 3. Compute the Break Even point for the company in units to be sold and sales in dollars. Douro Industries manufactures one product that is sold for $80 per unit. The following information pertains to the company's first year of operations in which it produced 40,000 units and sold 35,000 units. Variable costs per units Manufacturing: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $ $ $ $ 24 14 2 4 $800,000 $496,000 Required: 1. What is the unit product cost under variable costing? Douro Industries manufactures one product that is sold for $80 per unit. The following information pertains to the company's first year of operations in which it produced 40,000 units and sold 35,000 units $ 24 Variable costs per unit: Manufacturing: Direct materials Direct Labour Variable manufacturing overhead Variable selling and administrative Fixed costs per year Fixed manufacturing overhead Fixed velling and administrative expenses $ 5 2 4 $800,000 $496,000 2. What is the unit product cost under absorption costing? Unit peodud cost Douro Industries manufactures one product that is sold for $80 per unit. The following information pertains to the company's first year of operations in which it produced 40,000 units and sold 35,000 units. Variable costs per unit: Manufacturing: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative Fixed costs per year Fixed manufacturing overhead Fixed selling and administrative expenses $ $ $ 24 14 2 $800,000 $496,000 11. If the company produces 5,000 fewer units than it sells in its second year of operations, will absorption costing net operating income be higher or lower than variable costing net operating income in Year 2? Lower O Higher