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 O units Units produced 11,500 Units sold 10,100 Manufacturing costs Fixed overhead $103,500 Variable overhead $5 per unit Direct labour $12 per unit Direct material $27 per unit Selling and administrative costs Fixed $192,300 Variable $4 per unit sold The portable cooking unit sells for $111. Management is interested in the opening month's results and has asked for an income statement. (a) Your answer is correct. Assuming the company uses variable costing: 1. Calculate the manufacturing cost per unit. Manufacturing cost 44 per unit 2. Prepare a variable-costing income statement for the first month of operation. Fresh Air Products Income Statement-Variable Costing For the first month of operations Sales 1121100 Less Variable costs Variable cost of goods sold 444400 Variable selling and administrative expenses 40400 Total variable costs 484800 Contribution margin 636300 636300 Less Fixed costs Fixed manufacturing overhead 103500 Fixed selling and administrative expenses 192300 Total fixed costs 295800 340500 Operating income before tax Your answer is incorrect. Try again. Reconcile the difference in net income between the absorption-costing and variable-costing methods. Variable costing operating income Fixed manufacturing overhead costs deferred in ending inventory MX Absorption costing operating income