High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cat that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant's operation:

Management is anxious to see how profitable the new camp cot will be and has asked that an income statement be prepared for May.
Required:
1. Assume that the company uses absorption costing.
a. Determine the unit product cost.
b. Prepare an income statement for May.
2. Assume that the company uses variable costing.
a. Determine the unit product cost.
b. Prepare a contribution format income statement for May.
3. Explain the reason for any difference in the ending inventory balances under the tow costing methods and the impact of this difference on reported net operating income.

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Nacrosuit Exce 12 E20 Beginning invertory 2 Units produced 10,000 8,000 $75 3Units sold 4.. Seling price per unit Seling and administrative expenses: Variable per unit Fixed (total Manufacturing costs 200,000 10 Direct materials cost per urit Direct labor cost per unt 12 Variable marufacturing overhead cost per unit 13 Fixed manufacturing overhead cost (total) %20 $8 S2 $100000