Ross Company manufactures and sells a single product. The following costs were incurred during the companys first year of operations:

Variable costs per unit:
Manufacturing:
Direct materials	$	14
Direct labor	$	8
Variable manufacturing overhead	$	2
Variable selling and administrative	$	2
Fixed costs per year:
Fixed manufacturing overhead	$	250,000
Fixed selling and administrative	$	160,000

During the year, the company produced 25,000 units and sold 21,000 units. The selling price of the companys product is $47 per unit.

1a. Compute the unit product cost. Assume that the company uses absorption costing.

unit product cost ______

1b. prepare income statement for the year. Assume that the company uses absorption costing.

1c. Compute the unit product cost. Assume that the company uses variable costing.

unit product cost _______

1d. Prepare an income statement for the year. Assume that the company uses variable costing.

Absorption Costing Income Statement Variable Costing Income Statement