Information for Xantra Corp. is provided in P8-32A.

Instructions
(a) Assume the company uses normal costing and uses the budgeted volume of 25,000 pairs to allocate the fixed overhead rate rather than the actual production volume of 20,000 pairs. The company expenses production volume variance to cost of goods sold in the accounting period in which it occurs. Do the following:
1. Calculate the manufacturing cost per unit.
2. Prepare a normal-costing income statement for 2016.
(b) Reconcile the difference in net income between the absorption-costing and normal-costing methods.

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Units produced Units sold 20,000 pairs 18,000 pairs Selling price $200 per pair Production information: Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Variable marketing costs Fixed marketing costs $1,000,000 750,000 450,000 800,000 180,000 200,000