Lynch Company manufactures and sells a single product. The following costs were incurred during the company's...
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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 $11 Direct labor $4 Variable manufacturing overhead $1 Variable selling and administrative $1 Fixed costs per year: $ Fixed manufacturing overhead 308,000 $ 218,000 Fixed selling and administrative During the year, the company produced 28,000 units and sold 24,000 units. The selling price of the company's product is $41 per unit. Required: 1. Assume that the company uses absorption costing: a. Compute the unit product cost. Unit product cost $ 17 b. Prepare an income statement for the year. Lynch Company Absorption Costing Income Statement $ 0 2. Assume that the company uses variable costing: a. Compute the unit product cost. Unit product cost a. Compute the unit product cost. Unit product cost b. Prepare an income statement for the year. Variable expenses: Fixed expenses: Lynch Company Variable Costing Income Statement 0 0 0 $ 0 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 $11 Direct labor $4 Variable manufacturing overhead $1 Variable selling and administrative $1 Fixed costs per year: $ Fixed manufacturing overhead 308,000 $ 218,000 Fixed selling and administrative During the year, the company produced 28,000 units and sold 24,000 units. The selling price of the company's product is $41 per unit. Required: 1. Assume that the company uses absorption costing: a. Compute the unit product cost. Unit product cost $ 17 b. Prepare an income statement for the year. Lynch Company Absorption Costing Income Statement $ 0 2. Assume that the company uses variable costing: a. Compute the unit product cost. Unit product cost a. Compute the unit product cost. Unit product cost b. Prepare an income statement for the year. Variable expenses: Fixed expenses: Lynch Company Variable Costing Income Statement 0 0 0 $ 0
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