Exercise $6-6($Static$)$ Variable and Absorption Costing Unit Product Costs and Income Statements $[$LO$6-1,$ LO$6-2]$

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:

Assume the company uses absorption costing:

Compute the unit product cost.

Prepare an income statement for the year.

Assume the company uses variable costing:

Compute the unit product cost.

Prepare an income statement for the year.