Sele Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2010, the company incurred the following costs.

Variable Cost per Unit
Direct materials $6.50
Direct labor $2.45
Variable manufacturing overhead $5.75
Variable selling and administrative expenses $3.90

Fixed Costs per Year
Fixed manufacturing overhead $282,150
Fixed selling and administrative expenses $240,100

Sele Company sells the fishing lures for $25. During 2010, the company sold 80,000 lures and produced 95,000 lures.

Instructions:

(a) Assuming the company uses variable costing, find out Sele's manufacturing cost per unit for 2010.

(b) Prepare a variable costing income statement for 2010.

(c) Assuming the company uses absorption costing, find out Sele's manufacturing cost per unit for 2010.

(d) Prepare an absorption costing income statement for 2010.