Ees 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 Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead $ 380,000 Fixed selling and administrative $ 290,000 During the year, the company produced 38,000 units and sold 18,000 units. The selling price of the company's product is $61 per unit. Required: 1. Assume that the company uses absorption costing: a. Compute the unit product cost. $ 10 $7 $ 3 $3 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.

Lynch Company manufactures and selis a single product. The foliowing costs were incurred during the company's first year of operations Required: 1. Aswume that the compooy uses absorption costing a. Compute the unit producticost b. Propart an incame statement for the year 2. Assume that the company uses varible costiog: a Cornphte the unit product cost b. Prepare an income statement for the year