$ 12 $ 2 Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations: Variable costs per unit: Manufacturing: Direct materials $ 23 Direct labor Variable manufacturing overhead Variable selling and adninistrative Fixed coats per year! Fired manufacturing overhead $ 320,000 Fixed selling and adninistrative expenses $ 60,000 During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations. It produced 40,000 units and sold 50,000 units. The selling price of the company's product is $50 per unit. Required: 1. Assume the company uses variable costing: a Compute the unit product cost for Year 1 and Year 2. b. Prepare an income statement for Year 1 and Year 2. 2. Assume the company uses absorption costing: a Compute the unit product cost for Year 1 and Year 2. b. Prepare an income statement for Year 1 and Year 2. 3. Reconcile the difference between variable costing and absorption costing net operating income in Year 1. Req 1A Req 1B Reg 2A Req 2B Reg 3 Assume the company uses variable costing. Prepare an income statement for Year 1 and Year 2 Walsh Company Income Statement Year 1 Year 2 $ 2,000,000 $ 2,500,000 Sales Variable expenses Variable cost of goods sold 0 2,000,000 2,500,000 0 0 Net operating income (loss) $ 2,000,000 $ 2,500,000 Reg 1A Req 1B Req 2A Req 2B Req 3 Assume the company uses absorption costing. Compute the unit product cost for Year 1 a decimal places.) Year 1 Year 2 Unit product cost Req 1A Req 1B Req 2A Req 2B Req3 Assume the company uses absorption costing. Prepare an income statement fo calculations to 2 decimal places.) Walsh Company Income Statement Year 1 Year 2 Net operating income (loss) S O 0 $ 0 Req 1A Req 1B Req 2A Req 2B Reg 3 Reconcile the difference between variable costing and absorption costing net operating income in Year 1. (Enter any deductions as a negative value.) Year 1 Year 2 Variable costing net operating income (loss) Add (deduct) fixed manufacturing overhead deferred in (released from) inventory Absorption costing net operating income (loss)