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 $0$

Units produced $37,000$

Units sold $32,000$

Selling price per unit $ $81$

Selling and administrative expenses:

Variable per unit $ $3$

Fixed $($per month$)$ $ $560,000$

Manufacturing costs:

Direct materials cost per unit $ $15$

Direct labor cost per unit $ $7$

Variable manufacturing overhead cost per unit $ $1$

Fixed manufacturing overhead cost $($per month$)$ $ $740,000$

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.