The Dorset Corporation produces and sells a single product. The following data refer to the year just completed:

Beginning inventory		0
Units produced		28,100
Units sold		21,900
Selling price per unit	$	410
Selling and administrative expenses:
Variable per unit	$	23
Fixed per year	$	306,600
Manufacturing costs:
Direct materials cost per unit	$	229
Direct labor cost per unit	$	58
Variable manufacturing overhead cost per unit	$	36
Fixed manufacturing overhead per year	$	421,500

Assume that direct labor is a variable cost.

Required:

a. Compute the unit product cost under both the absorption costing and variable costing approaches.

b. Prepare an income statement for the year using absorption costing.

c. Prepare an income statement for the year using variable costing.

d. Reconcile the absorption costing and variable costing net operating income figures in (b) and (c) above.