The EG Company produces and sells one product: a microwave oven. The following data

refer to the year just completed:

Beginning inventory $0

Units produced 25,000

Units sold 20,000

Sales price per unit $400

Selling and administrative expenses:

Variable per unit $15

Fixed (total) $275,000

Manufacturing costs:

Direct materials cost per unit $200

Direct labour cost per unit $50

Variable overhead cost per unit $30

Fixed overhead (total) $300,000

Assume that direct labour is a variable cost.

SHOW ALL CALCULATIONS

a) What is the unit product cost for the month under absorption costing?

b. What is the unit product cost for the month under variable costing?

c. Explain the difference between variable and absorption costing.

c) show an income statement for the month using the absorption costing method.