Exercise 6-9 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements (L06-1, LO6-2, 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 conta per unit: Manufacturing Direct materials $ 26 Direct labor $ 11 Variable manufacturing overhead 93 Variable selling and administrative $2 mixed coats per year Tixed manufacturing Overhead $400,000 Tixed solling and administrative expenses $90,000 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 $55 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 Comniate thiennectinn hu anterinn nur answere in the tahe helow. Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Reg 2A Reg 2B Reg 3 Assume the company uses absorption costing. Prepare an income statement for Year 1 and Year 2. (Round your intermediate calculations to 2 decimal places.) Walsh Company Income Statement Year 1 Year 2 Sales $ 2,200,000 $2,750,000 Cost of goods sold 1,920,000 Gross margin 280,000 Selling and administrative expenses 170,000 190,000 Net operating income (los) $ 110,000 $(190,000) b. Prepare an income statement for Year 1 and Year 2. 3. Reconcile the difference between varlable costing and absorption costing net operating Income In Year 1. Complete this question by entering your answers in the tabs below. Reg 1A Reg 18 Reg 2A Reg 28 Reg 3 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 costing net operating income (loss) Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under absorption costing Absorption costing net operating income (loss)