Quality Harvesters Co. is a farming corporation that grows and sells crops in the Midwest. The company is publicly traded on the stock market: however, management prefers to use variable costing for decision purposes.

The company reported the following financial information for the past month:

Number of truckloads produced	2,000 truckloads
Direct Materials	$700 per truckload
Direct Labor	$750 per truckload
Variable Manufacturing Overhead	$350 per truckload
Fixed Manufacturing Overhead	$1,200,000
Variable S&GA costs	$50 per truckload
Fixed S&GA costs	$700,000

Required

1. Compute the unit product cost under absorption costing. Show your work.
2. Compute the unit product cost under variable costing. Show your work.
3. If the selling price is $3,500 per truckload and in total 1,800 truckloads are sold, please calculate the profit or loss under the absorption costing.
4. If the selling price is $3,500 per truckload and in total 1,800 truckloads are sold, please calculate the profit or loss under the variable costing.
5. If next year the company plans to produce 2,000 truckloads and sell 2,200 truckloads, which costing method generates higher profit?
6. If the company has sufficient production capacity, currently it receives a special one-time order request from the state government. Because the state government is experiencing financial problems due to a tightened budget, the state is willing to pay only $2,000/truckload for the same product. Consider the companys profit, will you accept the order from the government or not? Please provide reasons.