a new plant to produce a folding campa . . . OBLEM 6-20 Variable and Absorption Costing Unit Product Costs and Income Statements slanation of Difference in Net Operating Income (L01, LO2. LO31 Country, Inc., produces and sells many recreational products. The company has just to produce a folding camp cot that will be marketed throughout the United States. The no cost and revenue data relate to May, the first month of the plant's operation: Beginning inventory. Units produced 10,000 Units sold .......... 8.000 Selling price per unit ... Selling and administrative expen Variable per unit Fixed (per month)... $200,000 Manufacturing costs: Direct materials cost per unit... $20 Direct labor cost per unit ..... Variable manufacturing overhead cost per unit ... Fixed manufacturing overhead cost (per month) ....... $100,000 $75 . Management is anxious to see how profitable the new camp cot will be and has asked that an income statement be prepared for May. Required: 1. Assume that the company uses absorption costing. Q. Determine the unit product cost. b. Prepare an income statement for May. 2 Assume that the company uses variable costing. Assum a. Determine the unit product cost. Prepare a contribution format income statement for May. eason for any difference in the ending inventory balances under the two costing ods and the impact of this difference on reported net operating income, 3. Explain the reason for any a