Costs and Income Statements 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 Manufacturing: Direct materials $6 Direct labor ........... $9 Variable manufacturing overhead . . . . . .. $3 Variable selling and administrative . ....... .. . $4 Fixed costs per year. Fixed manufacturing overhead $300,000 Fixed selling and administrative $190,000 During the year, the company produced 25,000 units and sold 20,000 units. The selling price of the company's product is $50 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. 2. Assume that the company uses variable costing: a. Compute the unit product cost. b. Prepare an income statement for the year