EXERCISE 5-9 Variable and Absorption Costing Unit Product Costs and Income Statements 1021 Lynch Company manufactures and sells a single product. The following costs were incurred Juring 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 Fixed selling and administrative $6 $9 $3 $4 $300,000 $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: Compute the unit product cost. b. Prepare an income statement for the year. 2. Assume that the company uses variable costing: Compute the unit product cost. b. Prepare an income statement for the year