Problem $7-20$ Variable and Absorption Costing Unit Product Costs and Income Statements; Explanation of Difference in Net Operating Income $[$LO$7-1,$ LO$7-2,$ LO$7-3]$High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant's operation:Beginning inventory$0$Units produced$42,000$Units sold$37,000$Selling price per unit$$75$Selling and administrativeexpenses:Variable per unitFixed $($per month$)5567,000$Manufacturing costs:Direct materials cost per unit$$16$Direct labor cost per unit$$7$Variable manufacturing overhead cost per unit$Fixed manufacturing overhead cost $($per month$)$$$714,000$Management is anxious to assess the profitability of the new camp cot during the month of May.Required:$1.$ Assume that the company uses absorption costing.a$.$ Determine the unit product cost.b$.$ Prepare an income statement for May$\mathrm{.}2.$ Assume that the company uses variable costing.a$.$ Determine the unit product cost.b$.$ Prepare a contribution format income statement for May.N