40,000 J Units produced . Units sold Required I. Using variable costin 2. What is the variable costing net operating income in 3. Reconcile the absor g, what is the unit product cost for both years? Year 1 and in Year 22 ption costing and the variable costing net operating in each year PROBLEM 6-20 Variable and Absorption Costing Unit Product Costs and Income tion of Difference in Net Operating Income LO6-1, LO6-2, LO6-3 High Country, Inc., produces and sells many recreational products. The company has a new plant to produce a folding camp cot that will be marketed throughout the Unite following cost and revenue data relate to May, the first month of the plant's operatione Statements, Expa just omt 10,000 8,000 $75 Units sold Selling and administrative expenses $6 $200,000 Flxed (per month) . . . Manufacturing costs: Direct materials cost per unit.................... Direct labor cost per unit Variable manufacturing overhead cost per unit Fixed manufacturing overhead cost (per month).. . . . . . .. . . $20 $8 $2 . . . . . . . . . . . . . . . . $100,000 Management is anxious to assess the profitability o the new camp cot during the macd of May Required: 1. Assume that the company uses absorption costing. a. Determine the unit product cost. b. Prepare an income statement for May. 2. Assume that the company uses variable costing. 3. Explain the reason for any difference in the ending inventory balances under the th PROBLEM 6-21 Segment Reporting and Decision-Making Lo6-4 a. Determine the unit product cost. b. Prepare a contribution format income statement for May methods and the impact of this difference on reported net operating income. Company's contribution format income statement for June is as tollow