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 $ 12 $ 3 $ 1 $ 1 $ 324,000 $ 234,000 During the year, the company produced 27,000 units and sold 23,000 units. The selling price of the company's product is $42 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 1B Req 2A Req 2B Compute the unit product cost. Assume that the company uses absorption costing. Unit product cost $ 12 Req 1A Req 1B Req 2A Req 2B Prepare an income statement for the year. Assume that the company uses absorption costing. Lynch Company Absorption Costing Income Statement Sales Cost of goods sold $ 966,000 276,000 Gross margin 690,000 Selling and administrative expense 257,000 Net operating income $ 433,000 Req 1A Req 1B Req 2A Req 2B Compute the unit product cost. Assume that the company uses variable costing Unit product cost $ 16 Req 1A Req 1B Req 2A Req 2B Prepare an income statement for the year. Assume that the company uses variable costing Lynch Company Sales Variable expenses: Variable Costing Income Statement $ 966,000 Variable cost of goods sold $ 368,000 Variable selling and administrative expense 23,000 Contribution margin Fixed expenses: Fixed manufacturing overhead 324,000 Fixed selling and administrative 234,000 Net operating income 391,000 575,000 558,000 $ 17,000