Mitchell Company. produces a single product. Information concerning the company's operations

for the last year appear below:

Units in beginning inventory

0

Units produced

4,000

Units sold

3,200

Selling price per unit

$90

Variable costs per unit:

Direct materials

$35

Direct labor

$15

Variable manufacturing overhead

$5

Variable selling and administrative

$2

Fixed costs in total:

Fixed manufacturing overhead

$40,000

Fixed selling and administrative

$60,000

Required:

a. Compute the unit product cost under both absorption and variable costing.

b. Prepare an income statement for the year using absorption costing.

c. Prepare a contribution format income statement for the year using variable costing.