A product company produces only one product. The following data relates to the

A product company produces only one product. The following data relates to the October production.

Selling price

$200

Beginning inventory

5000

units

Variable costs per unit:

Produced

18000

units

Direct material

$50

Sold

20000

units

Direct labor

$30

Ending Inventory

3000

units

Variable manufacturing overhead

$10

Variable selling and administrative

$15

Fixed manufacturing overhead

$288000

Fixed selling and administrative

$40000

a. What is the unit product cost under variable costing?

b. What is the unit product cost under absorption costing?

c. Prepare an income statement for the month using the variable costing method.

d. Prepare an income statement for the month using the absorption (full) costing method.

e. What is ending inventory under variable costing?

f. What is ending inventory under absorption costing?

g. How much is the difference in the net income between full costing and variable costing and why did you get that
difference?