High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant's operation: Management is anxious to assess the profitability of the new camp cot during the month of May. Required:

Beginning inventory space 0

Units produced 10,000.

Units sold 8000 next one selling price per unit $75.

Selling and administrative expenses:

Variable per unit $6

Fixed (per month) $200,000

Manufacturing costs:

Direct materials cost per unit $20 next one direct labor cost per unit $8

Variable manufacturing overhead cost per unit $2

Fixed manufacturing overhead cost (per month) $100,000

Management is anxious to assess the profitability of the new camp cot during the month of May.

1-Assume that the company uses absorption costing.

1. Determine the unit product cost.
2. Prepare an income statement for May. (Traditional format)

2-Assume that the company uses variable costing.

a. Determine the unit product cost.

b. Prepare a contribution format income statement for May.

3- Explain the reason for any difference in the ending inventory balances under the two costing methods and the impact of this difference on reported net operating income.

Prepare the reconciliation Statement.