Kokomo Manufacturing Company produces a single product, model airplanes. A list of selected cost and operating data for last year follows:

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A. Assuming that Kokomo uses absorption costing, compute the inventory cost per unit, and prepare an income statement for the year using a traditional format.
B. Assuming that the company uses variable costing, compute the product cost per unit, and prepare an income statement for the year showing the contribution margin.
C. Explain the difference between the variable-costing and absorption-costing net income figures.
D. Assuming that Kokomo had finished goods in inventory at the beginning of the year, what would have happened to the company's net income if the number of units sold during the period had been greater than the number of units produced? Explain your answer.

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Beginning finished goods inventory in units 0 Units produced during the year 15.000 Units sold during the year 13,500 Ending finished goods inventory in units 1.500 Selling price per unit $60 Manufacturing costs: Variable costs per unit: Direct materials $20 Direct labor 12 Variable manufacturing overhead 8 Fixed manufacturing overhead $60,000 Selling and administrative expenses: Variable costs per unit sold $5 Fixed expenses $50.000