Cool Sky reports the following for its first year of operations. The company produced 42,000 units and sold 34,000 units at a price of $110 per unit.

Direct materials	$ 42	per unit
Direct labor	$ 16	per unit
Variable overhead	$ 5	per unit
Fixed overhead	$ 378,000	per year
Variable selling and administrative expenses	$ 12	per unit
Fixed selling and administrative expenses	$ 105,000	per year

Exercise 6-3 (Algo) Part 1a

1a. Assume the company uses absorption costing. Determine its total product cost per unit

Per unit product cost using:	Absorption costing
Total product cost per unit

1b. Assume the company uses absorption costing. Prepare its income statement for the year under absorption costing.

Income Statement (Absorption Costing)

2a. Assume the company uses variable costing. Determine its total product cost per unit.

Per unit product cost using:	Variable costing
Total product cost per unit

2b. Assume the company uses variable costing. Prepare its income statement for the year under variable costing.

Income Statement (Variable Costing)
Income