SpongeFun Products manufactures and sells a variety of swimming products. Recently, the company opened a new plant to manufacture a lightweight, inflatable boat. Cost and sales data for 2012 are shown below:

Manufacturing costs

Fixed overhead costs ............................................... $150,000

Variable overhead ................................................ $5 per boat

Direct labour ..................................................... $10 per boat

Direct materials .................................................. $10 per boat

Beginning inventory ................................................... 0 boats

Boats produced ......................................................... 50,000

Boats sold ................................................................ 46,000

Selling and administrative costs

Fixed ................................................................... $300,000

Variable ......................................................... $8 per boat sold

The boat sells for $60. Management is interested in the first year's results and has asked for an income statement.

Instructions

(a) Assuming the company uses absorption costing:

1. Calculate the production cost per unit.

2. Prepare an income statement for 2012.

(b) Assuming the company uses variable costing:

1. Calculate the production cost per unit.

2. Prepare an income statement for 2012.

(c) Reconcile the difference in net income between the absorption-costing and variable-costing methods.

(d) Assuming the company uses throughput costing:

1. Calculate the manufacturing cost per unit.

2. Prepare a throughput-costing income statement for 2012.

(e) Reconcile the difference in net income between the variable-costing and throughput-costing methods.