The following data are available for Ruggles Company for the year ended December 31, 2020.

Sales: 5,000 units

Budgeted production 4,000 units

Actual Production 3,100 units

Manufacturing costs incurred:

Direct materials: $10 per unit

Conversion (direct labor and variable overhead): $15 per unit

Fixed manufacturing overhead: $160,000

Nonmanufacturing costs incurred:

Variable: 10% of sales

Fixed: $74,000

Beginning inventories: none

Selling price per unit $80 per unit

REQUIRED:

1. Determine the product cost per unit for Absorption Costing, Variable Costing, and Throughput costing.
2. Prepare an income statement under Absorption Costing, Variable Costing, and Throughput costing.
3. Determine the Breakeven point under Variable Costing (Both in units and dollars)
4. Determine the Breakeven point under Absorption Costing (Both in units and dollars)
5. You have been asked for the preferred income statement to use Absorption, Variable, or Throughput costing. Which would you recommend? Explain your answer.
6. To expand on the above question. Your company has heard of the value of using a break-even analysis tool for budgeting purposes. What are the advantages of determining the break-even point under for variable costing and absorption costing?