Variable and Absorption Costing Frances Manufacturing makes only one product with total unit manufacturing costs of $70, of which $42 is variable. No units were on hand at the beginning of 2015. During 2015 and 2016, the only product manufactured was sold for $107 per unit, and the cost structure did not change. Frances uses the first-in, first-out inventory method and has the following production and sales for 2015 and 2016 Units Manufactured Units Sold 100,000 70,000 00,000 120,000 2015 2016 a. Prepare gross profit computations for 2015 and 2016 using absorption costing. Do not use negative signs with your answers. Absorption Costing 2015 2016 7,490,000$ 12,840,00 Sales Cost of goods sold: Beginning inventory 1,400,000 x Production 7,000,000 7,000,000 00,0008400,000x Goods available Less: Ending inventory 1,400,000 X Cost of goods sold 5,600,000X Gross profit 1,890,000x b. Prepare gross profit computations for 2015 and 2016 using variable costing. Do not use negative signs with your answers. Variable Costing 2015 2016 Sales 7,400,000 12,840,00 V Variable cost of goods sold: Beginning inventory 840,000 x Production 4,200,000V 4.200,000 Goods available 4,200,000 v 5,040,000 x Less: Ending inventory 840,000 X Variable cost of goods sold 3,360,000 Less: Fixed manufacturing costs 1,800,000 X Gross proft S 1,560,000