Variable costs per unit:

Manufacturing:

Direct materials

Direct labor

$$12$

$$4$

$$2$

$$2$

$$370,000$

$$200,000$

Variable selling and administrative

Fixed costs per year:

Fixed manufacturing overhead

Fixed selling and administrative

$$12$

$$4$

$$2$

$$2$

$$370,000$

$$200,000$

During the year, the company produced $37,000$ units and sold $18,000$ units. The selling price of the company's product is $$55$ per unit.

Required:

Assume the company uses absorption costing:

a$.$ Compute the unit product cost.

b$.$ Prepare an income statement for the year.

Assume the company uses variable costing:

a$.$ Compute the unit product cost.

b$.$ Prepare an income statement for the year.