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	$	41
Direct labour		12
Variable manufacturing overhead		5
Variable selling and administrative		8
Fixed costs per year:
Fixed manufacturing overhead		307,000
Fixed selling and administrative expense		89,600

During the year, the company produced 30,700 units and sold 22,400 units. The selling price of the companys product is $87 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.)