Exercise 6-9 (Static) Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2, L06-3) Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations 1 Book Print Variable costs per unit Manufacturing: Direct materials $ 25 Direct labor $ 15 Variable manufacturing overhead $ 5 Variable selling and administrative $ 2 Fixed costs per year! Fixed manufacturing overhead $ 250,00 Fixed selling and administrative expenses $ 60.000 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 $60 per unit. Required: 1. Assume the company uses variable costing: a. Compute the unit product cost for Year and Yepr 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 0 erence Complete this question by entering your answers in the tabs below. REGLA Reg 13 Reg 2A Reg 28 Reg Assume the company uses variable costing. Prepare an income statement for Year 1 and Year 2 Walsh Company Income Statement Sales Yeart Year 2 po o b. Prepare an income statement for Year 1 and Year 2. 3. Reconcile the difference between variable costing and absorption costing net operatir Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Reg 2A Reg 28 Req 3 Assume the company uses variable costing. Prepare an Income statement for Year 1 and Yea Walsh Company Income Statement Year 1 Year 2 Sales Variable expenses Variable selling and administrative Foxed manufacturing overhead Fixed selling and administrative Fixed selling and administrative 0 0 0 0 Net operating income (loss) $ oo 0 $ Fixed During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During produced 40,000 units and sold 50,000 units. The selling price of the company's product is $e 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 ince Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Reg 2A Reg 2B Req3 Assume the company uses absorption costing. Prepare an income statement for Year 1 and Year 2. calculations to 2 decimal places.) Walsh Company Income Statement Year 1 Year 2 Net operating income (loss) 0 $
