The Hampton Company produces and sells a single product. The following data refer to the year just completed.

Selling price $450

Units in beginning inventory0

Units produced 25,000
Units sold 22,000

Variable costs per unit:

Direct materials $150
Direct labor $75
Variable manufacturing overhead $25
Variable selling and admin $15

Fixed costs:

Fixed manufacturing overhead $275,000
Fixed selling and admin $200,000

Requirements:

a. Compute the cost of a single unit of product under both the absorption costing and variable costing approaches.

b. Prepare an income statement for the year using absorption costing.

c. Prepare an income statement for the year using variable costing.