Audiophonics Limited manufactures and sells high-quality and durable ear buds for use with personal electronics that are custom moulded to each customers ear. Cost data for the product follow:

Variable costs per unit:
Direct materials	$	7
Direct labour		18
Variable factory overhead		9
Variable selling and administrative		4
Total variable costs per unit	$	38
Fixed costs per month:
Fixed manufacturing overhead	$	267,800
Fixed selling and administrative		226,600
Total fixed cost per month	$	494,400

The product sells for $63 per unit. Production and sales data for May and June, the first two months of operations, are as follows:

	Units Produced	Units Sold
May	20,600	15,800
June	20,600	25,400

Income statements prepared by the Accounting Department using absorption costing are presented below:

	May			June
Sales	$	995,400		$	1,600,200
Cost of goods sold:
Beginning inventory		0			225,600
Add cost of goods manufactured		968,200			968,200
Goods available for sale		968,200			1,193,800
Less ending inventory		225,600			0
Cost of goods sold		742,600			1,193,800
Gross margin		252,800			406,400
Selling and administrative expenses		289,800			328,200
Operating income	$	(37,000)		$	78,200

Required:

1. Determine the unit product cost under each of the following methods.

2. Prepare variable costing income statements for May and June using the contribution approach. (Do not leave any empty spaces; input a 0 wherever it is required.)

3. Reconcile the variable costing and absorption costing operating income figures. (Loss amounts should be indicated with a minus sign.)