Fresh Air Products manufactures and sells a variety of camping products. Recently the company opened a new plant to manufacture a deluxe portable cooking unit. Cost and sales data for the first month of operations are shown below:

Manufacturing Costs

Fixed overhead $ 150,000

Variable overhead $ 7 per unit

Direct labour $ 15 per unit

Direct material $ 33 per unit

Beginning inventory 0 units

Units produced 15,000

Units sold 11,000

Selling and administrative costs

Fixed $ 121,000

Variable $ 3 per unit sold

The portable cooking unit sells for $90. Management is interested in the opening months results and has asked for an income statement.

Instructions

Calculate the production cost per unit, and prepare income statements for the month of June 2020 under absorption costing and Variable costing