Lynch Company manufactures and sells a single product. The following costs were incurred during the companys first year of operations:

Variable costs per unit:
Manufacturing:
Direct materials	$ 12
Direct labor	$ 6
Variable manufacturing overhead	$ 1
Variable selling and administrative	$ 1
Fixed costs per year:
Fixed manufacturing overhead	$ 308,000
Fixed selling and administrative	$ 218,000

During the year, the company produced 28,000 units and sold 15,000 units. The selling price of the companys product is $56 per unit.

Answer the following (1a. 1b. 2a. 2b.)

1. Assume the company uses absorption costing:
   1. Compute the unit product cost.
   2. Prepare an income statement for the year.
2. Assume the company uses variable costing:
   1. Compute the unit product cost.
   2. Prepare an income statement for the year.