Exercise $7-6($Algo$)$ Variable and Absorption Costing Unit Product Costs and Income Statements $[$LO$7-1,$ LO$7-2]$

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

Direct labor

Variable manufacturing overhead

Variable selling and administrative

Fixed costs per year:

Fixed manufacturing overhead

Fixed selling and administrative

$$13$ $$7$ $$1$ $$1$ $$288,000$ $$198,000$

During the year, the company produced $24,000$ units and sold $20,000$ units. The selling price of the company's product is $$48$ per unit.

Required:

Assume that the company uses absorption costing:

a$.$ Compute the unit product cost.

b$.$ Prepare an income statement for the year.

Assume that the company uses variable costing:

a$.$ Compute the unit product cost.

b$.$ Prepare an income statement for the year.

Complete this question by entering your answers in the tabs below.

Req $1$A Req $1$B

Compute the unit product cost. Assume that the company uses absorption costing.

Unit product cost

$$,33$

Complete this question by entering your answers in the tabs below.

Req $1A$

Req $1$B

Req $2A$

Req $2$B

Prepare an income statement for the year. Assume that the company uses absorption costing

$\backslash$table$[[$Lynch Company$],[$Absorption Costing Income Statement$],[$Sales$,$$$660,000$