Exercise 7-6 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements (LO7-1, L07-2] 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 $ 10 $ 4 $1 $ 1 $340,000 $ 250,000 During the year, the company produced 34,000 units and sold 16,000 units. The selling price of the company's product is $54 per unit. Required: 1. Assume that the company uses absorption costing: a. Compute the unit product cost. b. Prepare an income statement for the year. 2. 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 1A Req 18 Req 2A Req 28 Compute the unit product cost. Assume that the company uses absorption costing. Unit product cost R1A Req 18 > Req 1A Req 1B Req 2A Req 28 Prepare an income statement for the year. Assume that the company uses absorption costing. Lynch Company Absorption Costing Income Statement Req 1A Req 18 Req 2A Req 28 Compute the unit product cost. Assume that the company uses variable costing. Unit product cost < Req 18 Req 28> Req 1A Req 1B Req 2A Req 2B Prepare an income statement for the year. Assume that the company uses variable costing. Lynch Company Variable Costing Income Statement < Req 2A Req 28>