Variable and Absorption Costing Scott Manufacturing makes only one product with total unit manufacturing costs of 554, of which 540 is variable. No units were on hand at the beginning of 2019. During 2019 and 2020, the only product manufactured was sold for 565 per unit and the cost structure did not change Scott uses the first-out inventory method and has the following production and sales for 2019 2020 M asure Un a. Prepare gross profit computations for 2019 and 2020 using absorption costing Do not use negative signs with your answers. Sales 2020 $7,800,000 Absorption Costing 2019 $ 5,850,000 Cost of goods sold: Beginning inventory 0 Production 5,940,000 Goods available 5,940,000 Less Ending inventory 1,080,000 Cost of goods sold 4,860,000 Gross profit $ 990,000 1,080,000 5.940.000 7,020,000 540,000 6,480,000 1.320.000 $ b. Prepare gross profit computations for 2019 and 2020 using variable costing Do not use negative signs with your answers. Variable Costing 2019 2020 Sales $5.850,000 $ 7.800,000 Variable cost of goods sold: Beginning inventory 0 1,080,000 X Production 4400,000 4.400,000 Goods available 4,400,000 5,480,000 x Less: Ending inventory 800.000 400.000 Variable cost of goods sold 3,600,000 5.080,000 X Less: Fixed manufacturing costs 1,540,000 1,680,000 X Gross profit 710,000 5 1,040,000 X