Exercise 6-9 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements (LO6-1, L06-2, LO6-3) Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations: Variable costa per unit: Manufacturing Direct materials $ 22 Direct labor 5 10 Variable manufacturing overhead Variable selling and administrative $) Yixed costs per year Tixed manufacturing overhead $ 400,000 Tixed selling and adninistrative expenses $ 70,000 During its first year of operations, Walsh produced 50,000 urts 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 $59 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 Yeart Complete this question by entering your answers in the tabs below. Rec 13 Hea 1 Red 20 ROO ZA Rog Assume the company uses variable costing Compute the unit product cost for year 1 and year 2 Yeart Year 2 un productos Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Req 2A Req 28 Reg 3 Assume the company uses variable costing. Prepare an income statement for Year 1 and Year 2 Walsh Company Income Statement Year 1 Year 2 0 0 0 0 Net operating income (loso) $ 0 $ 0 www 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 $59 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. Complete this question by entering your answers in the tabs below. Reg 1A Reg 10 Reg 2A Reg 28 Reg Reconcile the difference between variable costing and absorption costing net operating income in Year 1. (Enter any losses or deductions as a negative value) Year 1 Year 2 Variable conting not operating income foss) Add(deduct) food manufacturing overhead detorted ( rood from) inventory under absorption costing Absorption couting net operating income (0)