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Question 5. Fletcher Company manufactures and sells one product. The following information pertains to each...

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Accounting

image Question 5. Fletcher Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations: During its first year of operations, Fletcher produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the company's product is $50 per unit. *The budgeted fixed manufacturing overhead was the same as the actual fixed manufacturing overhead costs incurred and the budgeted production level was achieved in both years Required: A. Assume the company uses variable costing: i. Compute the unit product cost for year 1 and year 2 . ii. Prepare an income statement for year 1 and year 2 . B. Assume the company uses absorption costing: i. Compute the unit product cost for year 1 and year 2 . ii. Prepare an income statement for year 1 and year 2 . C. Explain the difference between variable costing and absorption costing net operating income in year 1. Also, explain why the two net operating incomes differ in year 2

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