accounting 6 q 2

Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative S 12 S7 S2 S2 Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative S 248,000 158,000 During the year, the company produced 31,000 units and sold 21,000 units. The selling price of the company's product is $44 per unit. Required: 1. Assume that the company uses absorption costing: a. Compute the unit product cost. b. Prepare an income statement for the year. Absorption Costing Income Statement 2. Assume that the company uses variable costing: a. Compute the unit product cost