2. Below is operating information of Weber Light Aircraft, a company that produces light recreational aircraft.

	Per Aircraft	Per Month
Selling price	$100,000
Direct materials	$19,000
Direct labor	$5,000
Variable manufacturing overhead	$1,000
Fixed manufacturing overhead		$70,000
Variable selling and administrative expense	$10,000
Fixed selling and administrative expense		$20,000

	January	February	March
Beginning inventory	0	1	0
Units produced	2	2	5
Units sold	1	3	5
Ending inventory	1	0	0

a. Compute the unit product cost using variable costing method. (5 points)

b. Prepare an income statement for January, February and March using variable costing method. (5 points)

c. Compute the unit product cost using absorption costing method. (5 points)

d. Prepare an income statement for January, February and March using absorption costing method. (5 points)

e. Explain why both variable and absorption costing generate same income in a particular month, whereas in another month they generate different incomes. (5 points)