Check 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 Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year Fixed manufacturing overhead Fixed selling and administrative expenses 25 15 $ 250,000 $ 80,000 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 $60 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 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 inco Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 2B Red 3 Assume the company uses absorption costing. Prepare an Income statement for Year 1 and Year 2. calculations to 2 decimal places.) Walsh Company Income Statement Year 1 Sales $ 2,400,000 $ Cost of goods sold 2,000,000 (Gross margin 400,000 Selling and administrative expenses 160,000 Net operating income (loss) $ 240,000 $ Year 2 3,000,000 2,562,500 437,500 180,000 257,500 $ Req 1A Req 1B Req 2A Req 2B Req 3 Assume the company uses variable costing. Prepare an income statement for Year 1 and Yea Walsh Company Income Statement Year 1 Year 2 Sales Variable expenses: Variable cost of goods sold Variable selling and administrative Commissions 0 Oo 0 Total fixed expenses Contribution margin Fixed expenses: 0 0 $ 0 $ 0 Net operating income (loss) 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. Complete this question by entering your answers in the tabs below. Req 1A Reg 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 2 Year 1 190,000 S 320,000 50,000 Variable costing net operating income (loss) Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under absorption costing Absorption costing net operating income (62,500) 257,500 $ 240,000 $
