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	$	25
Direct labour		12
Variable manufacturing overhead		3
Variable selling and administrative		5
Fixed costs per year:
Fixed manufacturing overhead		200,000
Fixed selling and administrative expense		110,000

During the year, the company produced 25,000 units and sold 21,000 units. The selling price of the companys product is $65 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.)