Linden Company manufactures and sells a single product. Cost data for the product follow:

Variable costs per unit:
Direct materials		$5
Direct labor		10
Variable factory overhead		2
Variable selling and administrative		1
Total variable costs per unit		$18
Fixed costs per month:
Fixed manufacturing overhead	$	120,000
Fixed selling and administrative		175,000
Total fixed cost per month	$	295,000

The product sells for $45 per unit. Production and sales data for May and June, the first two months of operations, are as follows:

	Units Produced	Units Sold
May	30,000	26,000
June	30,000	34,000

Income statements prepared by the accounting department, using absorption costing, are presented below:

	May		June
Sales	$	1,170,000	$	1,530,000
Cost of goods sold		546,000		714,000
Gross margin		624,000		816,000
Selling and administrative expenses		201,000		209,000
Net operating income	$	423,000	$	607,000

Required:

1.	Determine the unit product cost under absorption costing and variable costing.

		Unit Product Cost
Absorption costing		?
Variable costing		?

2.	Prepare contribution format variable costing income statements for May and June. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.)

Variable Costing Income Statement
	May	June
Sales	$?	$?
Variable expenses:
Variable cost of goods sold	$?	$?
Variable selling and administrative expenses	$?	$?
Total variable expenses	$?	$?
Contribution margin	$?	$?
Fixed expenses:
Fixed manufacturing overhead	$?	$?
Fixed selling and administrative expenses	$?	$?
Total fixed expenses	$?	$?
Net operating income (loss)	$?	$?

3.	Reconcile the variable costing and absorption costing net operating incomes. (Loss amounts and amounts to be deducted should be indicated with a minus sign. Omit the "$" sign in your response.)

Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes
	May	June
Variable costing net operating income (loss)	$?	$ ?
Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under absorption costing	$?	$ ?
Absorption costing net operating income (loss)	$ ?	$ ?