Exercise $6-9($Static$)$ Variable and Absorption Costing Unit

Product Costs and Income Statements $[$LO$6-1,$ LO$6-2,$ LO$6-3]$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 $2\mathrm{.}2.$ 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 $2\mathrm{.}3.$ Reconcile the difference between variable costing and

absorption costing net operating income in Year $1.$