Variable costs per unit: Manufacturing: Direct materials $20
Direct labor $12
Variable manufacturing overhead $4
Variable selling and administrative $2
Fixed costs per year:
Fixed manufacturing overhead $960,000
Fixed selling and administrative
expenses $240,000

During its first year of Operations, produced 60,000 units and sold 60,000 units. During it's second year of operations, it produced 75,000 and sold 50,000 units. In its third year, it produced 40,000 units and sold 65,000 units. The selling price of the companys product is $58 per unit.

a. Compute the companys break even point in units sold.
b. Assume the company uses the variable costing:
c. Compete the unit product cost for year 1, year 2, year 3
d. Prepare an income statement for year 1, 2, and 3
e. Assume the company uses absorption costing:
e. Compute the unit product cost for year 1, 2, and 3
f. Prepare an income statement for year 1, 2, and 3
g. Compare the net operating income figures that you computed in requirements 2 and 3 to the break even point that you computed in requirement 1. which net operating income figures seem counterintuitive? why?