Zurgot Inc. has just organized a new division to manufacture and sell specially designed computer tables, using select hardwoods. The division's monthly costs are shown in the schedule below:

Manufacturing costs: Variable costs per unit: Direct materials $ 161 Variable manufacturing overhead $ 10 Fixed manufacturing overhead costs (total) $454,230 Selling and administrative costs: Variable 10 % of sales Fixed (total) $315,180 Zurgot 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 labour costs in its fixed manufacturing overhead. The tables sell for $430 each. During the first month of operations, the following activity was recorded: Units produced 4,635 Units sold 3,790 Required: 1. Compute the unit product cost under each of the following costing method. a Absorption costing _ a Variable costing _ 2. Prepare an income statement for the month using absorption costing. Cost of goods sold: 3. Prepare a contribution format income statement for the month using variable costing. Variable expenses: Variable cost of goods sold: Fixed expenses: 5. Reconcile the absorption costing and variable costing operating income gures in (2) and (3) above. Variable costing operating income (loss) Add: Fixed manufacturing overhead cost deferred in inventory under absorption costing Absorption costing operating income (loss)