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:

Beginning inventory 0 units

Units produced 10,000

Units sold 8,900

Manufacturing costs

Fixed overhead $80,000

Variable overhead $7 per unit

Direct labour $11 per unit

Direct material $26 per unit

Selling and administrative costs Fixed $195,500

Variable $4 per unit sold

The portable cooking unit sells for $111. Management is interested in the opening months results and has asked for an income statement.

a) Calculate the manufacturing cost per unit.

b) Prepare a variable-costing income statement for the first month of operation.