Baxtell Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Variable costs per unit: Manufacturing: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expense Answer is complete and correct. Unit product cost 28 16 During the year, the company produced 32,650 units and sold 27,100 units. The selling price of the company's product is $89 per unit. Required: 1. Assume that the company uses absorption costing. a. Compute the unit product cost. 66 7 8 489,750 216,800 b. Prepare an income statement for the year. (Do not leave any empty spaces; input a 0 wherever it is required.) Sales Cost of goods sold: Answer is complete but not entirely correct. Absorption Costing Income Statement O Beginning inventory Add: Cost of goods manufactured Goods available for sale Less: Ending inventory. Gross margin Selling and administrative expenses Operating income s 623,300 433,600 1,056,900 189,700 ****000 $2,411,900 867,200 1,544,700 180,700 $1,355,000 2. Assume that the company uses variable costing. a. Compute the unit product cost. Answer is complete and correct. $ 51 Unit product cost b. Prepare an income statement for the year. (Do not leave any empty spaces; input a 0 wherever it is required.) Answer is complete but not entirely correct. Variable Costing Income Statement Sales Variable expenses: Variable cost of goods sold: Variable selling expense Add: Variable manufacturing costs Goods available for sale Add: Ending inventory Variable cost of goods sold Fixed manufacturing overhead Contribution margin Fixed expenses: Fixed selling and administrative Fixed manufacturing overhead Operating income x $1,382,100 216,800 1,598,900 1,598,900 0 813,000 489,750 216,800 $ 2,411,900 ( 813,000 1,598,900 706,550 892,350