1 Problem 7-20 (Static) Variable and Absorption Costing Unit Product Costs and Income Statements; Explanation of Difference in Net Operating Income [LO7-1, LO7-2, LO7-3] 4 points High Country, Incorporated, produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot 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: Skipped 0 0 10,000 8,000 $ 75 eBook Beginning inventory Units produced Unite gold Selling price per unit Selling and administrative expenses: Variable per unit Fixed (per month) Manufacturing costs Direct materials cost per unit Direct labor cost per unit Variable manufacturing overhead cost per unit Fixed manufacturing overhead cost (per month) () $ 6 $ 200,000 Print $ 20 $8 $ 2 $ 100,000 References Management is anxious to assess the profitability of the new camp cot during the month of May. Required: 1. Assume that the company uses absorption costing. a. Calculate the unit product cost. b. Prepare an income statement for May. 2. Assume that the company uses variable costing. a. Calculate the unit product cost. b. Prepare a contribution format income statement for May. Complete this question by entering your answers in the table below. Reg 1A Reg 1B Req 2A Reg 28 Prepare a contribution format income statement for May. Assume that the company uses variable costing. $ 600,000 High Country, Incorporated, Variable Costing Income Statement Sales Variable expenses Variable cost of goods sold $ 240,000 Variable selling expense 48,000 Variable cost of goods sold 288,000 576,000 24,000 0 Net operating income $ 24,000