Data concerning Sonderegger Company's operations last year appear below:

Selling price $110

Units in beginning inventory 0

Units produced 70,000

Units sold 60,000

Selling price per unit $12.00

Variable costs per unit:

Direct materials $2.00

Direct labour $1.00

Variable manufacturing overhead $1.00

Variable selling and administrative $1.50

Fixed costs:

Fixed manufacturing overhead $140,000

Fixed selling and administrative $150,000

Question:

a) What is the unit product cost for the month under variable costing? 5 MARKS

b) What is the unit product cost for the month under absorption costing? 5 MARKS

c) Make an income statement for the month using the absorption costing method.

10 MARKS