Tabletops Products, Inc., has just organized a new division to manufacture and sell specially designed tables using select hardwoods for personal computers. The divisions monthly costs are shown in the schedule below:

Manufacturing costs:
Variable costs per unit:
Direct materials	$	88
Variable manufacturing overhead	$	2
Fixed manufacturing overhead costs (total)	$	139,200
Selling and administrative costs:
Variable		6	% of sales
Fixed (total)	$	154,000

Tabletops Products regards all of its workers as full-time employees and the company has a long-standing no-layoff policy. Furthermore, production is highly automated. Accordingly, the company includes its labor costs in its fixed manufacturing overhead. The tables sell for $360 each.

During the first month of operations, the following activity was recorded:

Units produced	2,400
Units sold	1,920

Required:

1.	Compute the unit product cost under absorption costing and variable costing.

2.	Prepare an income statement for the month using absorption costing.

3.	Prepare a contribution format income statement for the month using variable costing.

5.	Reconcile the absorption costing and variable costing net operating incomes in (2) and (3) above.