Variable costs per uniti Direct materials Direct Labour Variable factory overhead Variable selling and administrative Total variable coste per unit 21 8 7 51 Fixed coste per month Tixed manufacturing overhead Fixed selling and administrative Total fixed cost per month $170,000 187,000 $357.000 The product sells for $74 per unit. Production and sales data for May and June, the first two months of operations, are as follows: Unit Produced 17,000 17.000 May June Unite Bold 14,000 20,000 Income statements prepared by the Accounting Department using absorption costing are presented below. Hay June $1,036,000 $1,450,000 Cost of goods soldi Beginning inventory 162.000 Add cost of good manufactured 518,000 918.000 Goods available for sale 910,000 1,000,000 Les ending inventory 162.000 Cont of goods sold 756,000 1.000.000 Grous margin 280,000 400.000 Selling and administrative expenses 295,000 327,000 Operating income $5,000) 73,000 May June $ 1.036.000 1.480.000 0 0 0 0 Sales Variable expenses Variable cost of goods sold: Beginning inventory Add: Variable production costs Goods available for sale Les Ending inventory Variable cost of goods sold Variable selling and administrative Total variable expen Contribution margin Fixed expenses Fixed manufacturing overhead Fixed seling and administrative Total foxed expenses Operating income foss) 0 1036,000 1480,000 $1,0000 $ 1450.000 3. Reconcile the variable costing and absorption costing operating income figures. (Loss amounts should be indicated with a minus sign. May Variable costing operating income (10) Add: Fixed manufacturing overhead cost deferred in inventory under absorption costing Deduct Foxed manufacturing overhead cost released from inventory under absorption costing Absorption costing operating income 5 05 O