The Raptor Compnay had the following results for its first two years of operation:
In year 1, the company sold 40,000 units of product
In year 1, the company produced 40,000 units of product
In year 2, the company sold 40,000 units of product
In year 2, the company produced 60,000 units of product
Variable production cost is $5.00 per unit
Fixed manufacturing overhead cost is $620,000 a year
Fixed manufacturing overhead cost is $150,000
Variable selling and administrative expense $2.00 per unit sold
Required:
Compute the unit product cost for each year under absorption costing and under variable costing (round to the nearest whole number)
Information given
Selling Price per unit sold	$30
Variable production cost per unit produced	$5
Fixed manufacturing overhead costs per year (620,000 / 40,000); (620,000 / 60,000)	$620,000
Fixed manufacturing overhead cost (150,000 / 40,000); (150,000 / 60,000)	$150,000
Variable selling and administrative expenses per unit sold	$2
	Year 1	Year 2
Units in beginning inventory	-	-
Units produced	40,000	60,000
Units sold	40,000	40,000
Units in ending inventory	-	20,000

	Year 1	Year 2
Sales	$1,200,000	$1,200,000
Cost of goods sold	$600,000	$600,000
Gross margin	$600,000	$600,000
Selling and administrative expense	$200,000	$200,000
Operating income	$400,000	$400,000