Blue Devil Corporation produces a single product and has the following cost structure:

Number of units produced each year	4,000
Manufacturing costs:
Direct materials PER UNIT	$50
Direct labor PER UNIT	$72
Variable manufacturing overhead PER UNIT	$6
Total fixed manufacturing overhead	$296,000
Operating expenses per year:
Variable operating expenses	$12,000
Fixed operating expense	$76,000

Required:

a. Compute the unit product cost under absorption costing. Show your work.

b. Compute the unit product cost under variable costing. Show your work.

c. If Blue Devil sells 3,500 units of product in this year at $320 unit selling price, please calculate the profit or loss under the absorption costing.

d. If Blue Devil sells 3,500 units of product in this year at $320 unit selling price, please calculate the profit or loss under the variable costing.

e. If next year Blue Devil plans to produce 5,000 units and sell 5,500 units, which costing method generates the higher profit? Show your work.