For the coming year, Paulson Computers Inc. expects to produce 144,000 computers. Of these, 64,000 will be consumer (personal) computers and 80,000 will be small business computers. Common fixed overhead is $1,700,600. Additional information for the coming year is as follows:

	Consumer	Small Business
	Computers	Computers
Price	$ 643	$ 1,670
Unit direct materials	490	1,177
Unit direct labor	90	310
Unit variable overhead	24	49
Unit variable selling expense	35	64
Total direct fixed overhead	120,400	349,500

Fixed selling and administrative expense for Paulson Computers is $2,959,400 per year.

	Required:
1.	CONCEPTUAL CONNECTION: Calculate the unit variable cost under variable costing. Is this cost the same as unit variable product cost? Why or why not?
2.	Prepare a segmented variable-costing income statement for next year. The segments correspond to product lines: consumer computers and small business computers.

1		Consumer Computers	Small Business Computers	Total
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Add common fixed expenses
Add direct fixed expenses
Add variable expenses
Less common fixed expenses
Less direct fixed expenses
Less variable expenses
Amount Descriptions
Common fixed overhead
Common selling and administrative
Contribution margin
Direct fixed overhead
Direct selling and administrative
Operating loss
Operating income
Sales
Segment margin
Variable cost of goods sold
Variable selling expense