Brock Company produces and sells an industrial product. The company has just opened a new plant to manufacture the product, and the following cost and revenue data have been provided for the first month of the plants operation:

Beginning inventory		0
Units produced		40,000
Units sold		35,000
Selling price per unit	$	60
Selling and administrative expenses:
Variable per unit	$	2
Fixed (total)	$	560,000
Manufacturing costs
Direct materials cost per unit	$	15
Direct labour cost per unit	$	7
Variable manufacturing overhead cost per unit	$	2
Fixed manufacturing overhead cost (total)	$	640,000

Required:

1. Assume that the company uses absorption costing.

a. Determine the unit product cost.

b. Prepare an income statement for the month.

2. Assume that the company uses variable costing.

a. Determine the unit product cost.

b. Prepare a contribution format income statement for the month. (Negative amounts should be indicated by a minus sign.)

3. This part of the question is not part of your Connect assignment.

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