Production costs $($per unit$)$

Direct materials.

Direct labor

Manufacturing overhead

Variable $($per unit$)$

Fixed

$[$$$4],[7],[7],[200,000],[5],[90,000]$

During the year, the company produced $25,000$ units and sold $10,000$ units. The selling price of the company's product is $$70$ per unit.

a$)$ Assume that the company uses absorption costing. Compute the product cost per unit.

Product cost per unit $=$$

b$)$ Assume that the company uses absorption costing. Prepare an income statement for the year.

NorthCo

Income Statement

For Year Ended December $31,2019$

Sales

Cost of goods sold

Gross profit

Selling and administrative expenses

Net operating income $($loss$)$

c$)$ Assume that the company uses variable costing. Compute the product cost per unit.

Product cost per unit $=$$

d$)$ Assume that the company uses variable costing. Prepare an income statement for the year.

NorthCo

Income Statement

For Year Ended December $31,2019$

Sales...

Variable expenses

Variable cost of goods sold

Variable selling and administrative expenses

Contribution margin.

Fixed expenses