Thornton Manufacturing pays its production managers a bonus based on the company's profitability. During the two most recent years, the company maintained the same cost structure to manufacture its products. Units Produced Units Sold 4,000 6,000 4,000 4,000 Year Production and Sales Year 2 Year 3 Cost Data Direct materials Direct labor Manufacturing overhead-variable Manufacturing overhead-fixed Variable selling and administrative expenses Fixed selling and administrative expenses $ 13.90 per unit $ 23.20 per unit $ 11.80 per unit $96,600 $ 7.10 per unit sold $59,000 (Assume that selling and administrative expenses are associated with goods sold.) Thornton sells its products for $109.40 per unit. Required a. Prepare income statements based on absorption costing for Year 2 and Year 3. b. Since Thornton sold the same number of units in Year 2 and Year 3, why did net income increase in Year 3? d. Determine the costs of ending inventory for Year 3. e. Prepare income statements based on variable costing for Year 2 and Year 3