Exercise 4-9 (Static) Variable and Absorption Costing Unit Product Costs and Income Statements [LO4-1, L04-2, LO4-3] Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations: 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 and Year 2. Complete this question by entering your answers in the tabs below. Assume the company uses variable costing. Prepare an income statement for Year 1 and Year 2. \begin{tabular}{|l|r|r|} \hline \multicolumn{2}{|c|}{ Income Statement } \\ \hline \multicolumn{2}{|c|}{ Year 1 } & \multicolumn{1}{c|}{ Year 2 } \\ \hline Sales & & \\ \hline Variable expenses: & & \\ \hline Variable cost of goods sold & & \\ \hline Variable selling and administrative & 80,000 & 100,000 \\ \hline & & \\ \hline & & \\ \hline Total variable expenses & 80,000 & \\ \hline Contribution margin & (80,000) & (100,000 \\ \hline Fixed expenses: & & \\ \hline Fixed selling and administrative & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Total fixed expenses & & \\ \hline Net operating income (loss) & & \\ \hline \end{tabular} Assume the company uses absorption costing. Compute the unit product cost for Year 1 and Year 2. Note: Round your answer to 2 decimal places. Reconcile the difference between variable costing and absorption costing net operating income in Year 1 and Year 2. Note: Enter any losses or deductions as a negative value