Sivan Co. manufactures and sells one product. For the year, they started with no opening inventory; produced 100,000 units but only sold 70,000 units. The selling price per each unit is $80. The variable costs per unit were: Direct materials.........................7 Direct Labor .............................6 variable manufacturing overhead....5 variable selling and administrative….6 Fixed costs per year: Fixed manufacturing Overhead ................$700,000 Fixed Selling and Administrative expenses….$300,000 (a) Prepare the Income Statement using Absorption Costing. (b) Prepare the Income Statement using Variable Costing. Solution a. absorption costing means that all costs are absorbed by the units being made. So all overheads and fixed costs will be included. b. Under this method, variable costs are considered. .