Consider the following budget information for a single product firm projecting its first three years of operations:

Sales price $ 50 per unit sold

Variable manufacturing costs $ 20 per unit produced

Variable selling and administrative expenses $ 10 per unit sold

Total fixed manufacturing overhead $ 48,000 per year

Total fixed selling and administrative $ 32,000 per year

All units started into production in a given day will be completed that day, i.e., the firm will have no work-in-process inventories. The firm uses a FIFO inventory flow assumption. (For absorption costing, assume the firm calculates a new fixed overhead rate each year, based on that years projected production in units.)

	Year 1	Year 2	Year 3
Production in units	6,000	8,000	4,000
Sales in units	6,000	6,000	6,000

Assuming that the firms actual costs, selling price and volume of production and sales are exactly as budgeted, complete the tables below:

Unit product cost with:	Year 1	Year 2	Year 3
Variable Costing
Absorption Costing

Operating Income with:	Year 1	Year 2	Year 3
Variable Costing
Absorption Costing