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

Manufacturing costs:
Variable costs per unit:
Direct materials	$	152
Variable manufacturing overhead	$	10
Fixed manufacturing overhead costs (total)	$	340,000
Selling and administrative costs:
Variable		15	% of sales
Fixed (total)	$	160,000

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 $400 each.

During the first month of operations, the following activity was recorded:

Units produced		4,000
Units sold		3,200

Required:

1. Compute the unit product cost under each of the following costing method.

2. Prepare an income statement for the month using absorption costing. (Do not leave any empty spaces; input a 0 wherever it is required.)

3. Prepare a contribution format income statement for the month using variable costing. (Do not leave any empty spaces; input a 0 wherever it is required.)

4. This part of the question is not part of your Connect assignment.

5. Reconcile the absorption costing and variable costing operating income figures in (2) and (3) above.