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

$ $ $5$

Variable selling and

Fixed costs per year:

Fixed manufacturing overhead $ $286,000$

Fixed selling and administrative $ $196,000$

During the year, the company produced $26,000$ units and sold $22,000$ units. The selling price of the company's product is $$46$ per

unit.

Required:

Assume the company uses absorption costing:

a$.$ Compute the unit product cost.

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

Assume the company uses variable costing:

a$.$ Compute the unit product cost.

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