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In: AccountingHerro Corporation began operations inJuly and manufactured 40,000 units during the month with thefollowing...Herro Corporation began operations inJuly and manufactured 40,000 units during the month with thefollowing unit costs:Directmaterials $7.00Directlabor 4.00Variableoverhead 3.00Variable marketingcost 3.00Total fixed factory overhead is$400,000 per month. During July, 35,000 units were sold at a priceof $40, and fixed marketing and administrative expenses were$150,000.Required:Calculate the unit product cost of each unit using absorptioncosting and variable costing.Prepare a variable costing income statement for HerroCorporation for the month of July.Explain how variable costing differs from absorptioncosting.