Question 1 Automated Bhd. manufactures and sells a unique electronic part. The company's plant is highly automated with low variable and high fixed manufacturing costs. The following information pertain to the company for its first three years of activity: variable manufacturing costs total RM3 per unit, and fixed manufacturing overhead costs total RM400,000. variable selling and administrative expenses are RM2 per unit sold. Fixed selling and administrative expenses total RM100,000. the company uses a first-in, first-out (FIFO) inventory flow assumption. Year 1 Year 2 Year 3 Units production 40,000 50,000 20,000 Units sales 40,000 30,000 40,000 Sales revenue RM704,000 RM528,000 RM704,000 . Required: 1. Prepare income statements for the company using absorption costing and variable costing approach. 2. After reviewing the income statements prepared by the company's management accountant, the sales manager is not happy with what he saw. It doesn't make sense at all! We sold fewer units in Year 2 than in Year 1, but our net income was higher in Year 2. And we suffered a loss in Year 3 but reported a profit in Year 1 despite selling the same amount of products! Does he even know how to do his job?" asked the sales manager. In your opinion, which income statement was he referring to and do you agree with the sales manager? Explain