SilverLine Manufacturing wants to identify the behavior of the three costs shown below. Cost information is provided for six months.

Month	Units Produced	Cost 1 Total Costs	Cost 1 Costs per Unit	Cost 2 Total Costs	Cost 2 Costs per Unit	Cost 3 Total Costs	Cost 3 Costs per Unit
1	20,000	$40,000		$22,000		$6,000
2	18,000	$36,000		$21,600		$6,000
3	16,000	$32,000		$20,800		$6,000
4	14,000	$28,000		$19,600		$6,000
5	12,000	$24,000		$18,000		$6,000
6	10,000	$20,000		$16,000		$6,000

Required:

a. Calculate the cost per unit (rounded to the nearest cent), and then identify how the cost behaves (fixed, variable, or mixed) for each of the three costs. Explain the reasoning behind your answers.

b. Prepare the income statement and balance sheet for the period.