Baxtell Company manufactures and sells a single product. The following costs were incurred during the companys first year of operations:

Variable costs per unit:
Manufacturing:
Direct materials	$	45
Direct labour		13
Variable manufacturing overhead		4
Variable selling and administrative		6
Fixed costs per year:
Fixed manufacturing overhead		375,000
Fixed selling and administrative expense		238,500

During the year, the company produced 31,250 units and sold 26,500 units. The selling price of the companys product is $94 per unit.

Required:

1. Assume that the company uses absorption costing.

a. Compute the unit product cost.

b. Prepare an income statement for the year. (Do not leave any empty spaces; input a 0 wherever it is required.)

2. Assume that the company uses variable costing.

a. Compute the unit product cost.

b. Prepare an income statement for the year. (Do not leave any empty spaces; input a 0 wherever it is required.)