Fresh Air Products Company manufactures and sells a variety of camping products. Recently the company opened a new plant to manufacture a deluxe portable cooking unit. Cost and sales data for the first month of operations are shown below:

Manufacturing Costs

Fixed Overhead $120,000

Variable overhead $3 per unit

Direct labor $12 per unit

Direct material $30 per unit

Beginning inventory 0 units

Units produced 10,000

Units sold 8,000

Selling and Administrative Costs

Fixed $200,000

Variable $4 per unit sold

The portable cooking unit sells for $110. Management is interested in the opening month’s results and has asked for an income statement.


Assume the company uses absorption costing. Calculate the production cost per unit and prepare an income statement for the month of June, 2011.