Problem 6-20 (Static) Variable and Absorption Costing Unit Product Costs and Income Statements; Explanation of Difference in Net Operating Income (L06-1, L06-2, L06-3) 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 10,000 Units sold 8.000 Selling price per unit $ 75 Selling and administrative expenses Variable per unit 56 Fixed (per month) $ 200,000 Manufacturing costs Direct materials cost per unit 8 20 Direct labor cost per unit $ Variable manufacturing overhead cont per unit $ 2 Fixed manufacturing overhead cont (per month) $100,000 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 Anar la comalete but not entirely correct. 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. Answer is complete but not entirely correct. Complete this question by entering your answers in the table below. Req 1A Reg 1B Reg 2A Req 2B Determine the unit product cost. Assume that the company uses absorption costing. Unit product cost s 40 ROLA Req 1B > 2. Assume that the company uses variable costing. a. Calculate the unit product cost. b. Prepare a contribution format income statement for May. Answer is complete but not entirely correct. Complete this question by entering your answers in the table below. Req 1A Recib Req 2A Req 2B Prepare an income statement for May. Assume that the company uses absorption costing. High Country, Incorporated Absorption Costing Income Statement Sales $ 600,000 Cost of goods sold 320,000 Gross margin 280,000 Selling and administrative expenses 56.000 Net operating income $ 224.000 Req 1A Req 1B Req 2A Req 2B Prepare a contribution format income statement for May. Assume that the company uses va High Country, Incorporated Variable Costing Income Statement Sales Variable expenses Variable cost of goods sold $ 240,000 Variable selling expense 48,000 $ 600,000 288,000 312,000 Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative expense 400,000 200,000 Net operating income 600,000 $ (288,000)