High Country, Incorporated, 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: Beginning inventory Units produced Units sold Selling price per unit Selling and administrative expenses: Variable per unit Fixed (per month) Manufacturing costs: Direct labor cost per unit Direct materials cost per unit Variable manufacturing overhead cost per unit Fixed manufacturing overhead cost (per month) 49,000 44,000 $83 $ 2 $ 557,000 $ 17 $8 $ 3 $ 931,000 Management is anxious to assess the profitability of the new camp cot during the month of May. Required: 1. Assume that the company uses absorption costing. a. Calculate the unit product cost. b. Prepare an income statement for May. 2. Assume that the company uses variable costing. a. Calculate the unit product cost. b. Prepare a contribution format income statement for May. Prepare a contribution format income statement for May. Assume that the company uses variable costing. Sales Variable expenses: High Country, Incorporated Variable Costing Income Statement. $ 3,652,000 6 Variable cost of goods sold Variable selling expense Variable selling expense $ 1,232,000 88,000 Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative expense Fixed selling and administrative expense Net operating income 931,000 557,000