ueen Industries has one product. Information about the production and sales of that product for the past year follow. (Click the icon to view the data.) The company had no beginning inventory Read the requirements L Requirement 1. Prepare two income statements for the year, one using absorption costing and one using variable costing Begin by preparing the income statement for the year using absorption costing Queen Industries Income Statement (Absorption Costing) Sales revenue For the Year Ended Less Cost of goods sold Gross profit Less Operating expenses Operating income Now prepare the income statement for the year using variable costing. Queen Industries Contribution Margin Income Statement (Variable Costing) For the Year Ended Sales revenue Less: Variable expenses Variable cost of goods sold Variable operating expenses Contribution margin Less: Fixed expenses Fixed manufacturing overhead Fixed operating expenses Operating income Use the statements you prepared to answer the following questions: 1a. What is the product cost per unit using absorption costing? 1b. What is the product cost per unit using variable costing? 1c. What is the ending inventory balance using absorption costing? 1d. What is the ending inventory balance using variable costing? 1e. What is cost of goods sold using absorption costing? 1c 1d. 10. 11. What is the ending inventory balance using absorption costing? What is the ending inventory balance using variable costing? What is cost of goods sold using absorption coating? What is cast of goods sold using variable coating? 1g. What is operating income using absorption costing? 1h. What is operating income using variable costing? Requirement 2. What is the underlying reason for the difference in operating income between the two costing methods? Absorption costing generates a higher operating income. This is because under absorption casting feed manufacturing overhead becomes part of the product cost of each unt expenses all of the feed manufacturing overhead as a period cust Selling price per unit. Direct material per unit... Direct labor per unit..... Total annual manufacturing overhead 69 $ 53.00 $ 22.00 $ EA 4.00 $ 306,000 Fixed portion of annual manufacturing overhead. $ 288,000 Variable operating expenses per unit sold 69 $ 2.00 Fixed operating expenses per year in total....... $ 49,000 Units manufactured. 18,000 Units sold 16,000