Titus Equipment Company manufactures and distributes industrial air compressors. The following costs are available for the year ended December 31, 2010.The company has no beginning inventory. In 2010, 1,500 units were produced, but only 1,300 units were sold. The unit selling price was $4,500. Costs and expenses were:Variable costs per unitDirect materials ………………………………..$ 1,000Direct labor ………………………………………1,500Variable manufacturing overhead …………………300Variable selling and administrative expenses ………70Annual fixed costs and expensesManufacturing overhead ………………….$1,400,000Selling and administrative expenses …………100,000
Instructions(a) Compute the manufacturing cost of one unit of product using variable costing.(b) Prepare a 2010 income statement for Titus Company using variable costing.