Shaylee produces luxury dog beds. Each dog bed sells for $125. Shaylee has the following costs:

direct material costs $15 per bed

production worker wages $25 per bed

cost of production equipment rental $288,000 per year

production salaries $60,000 per year

rent on factory $15,000 per month

rent on the administration building $10,000 per month

sales commission $2 per bed

Shaylees landlord for her factory charges a monthly fee based on the number of dog beds produced:

0-2,000 dog beds $500

2,001 6,000 dog beds $1,000

6,001-10,000 dog beds $2,000

1. Prepare a contribution margin income statement in good form assuming 5,000 dog beds are produced and sold per month.

2. What is the product cost per unit if 2,000 dog beds are produced and sold per month? What is the product cost per unit if 8,000 dog beds are produced and sold per month?