Johnson Corporation_absorption costing_variable costing

Johnson Corporation manufactures and sells a single product. The following 

 costs were incurred during the company’s first year of operations: 

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 Variable costs per unit: 

 Manufacturing: 

 Direct materials $8 

 Direct labor $7 

 Variable manufacturing overhead $2 

 Variable selling and administrative $5 

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 Fixed costs per year: 

 Fixed manufacturing overhead $350,000 

 Fixed selling and administrative $220,000 

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 During the year, the company produced 25,000 units and sold 20,000 units. The 

 selling price of the company’s product is $55 per unit. 

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 Required: 

a) Compute the unit product cost assuming that the company uses: 

1) The absorption costing method. 

2) The variable costing method. 

3) The throughput costing method. 

b) Prepare an income statement using the variable costing method.