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 $ 11 $ 8 $ 1 $1 $ 420,000 $ 330,000 During the year, the company produced 30,000 units and sold 25,000 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. Unit product cost b. Prepare an income statement for the year. Lynch Company Absorption Costing Income Statement 2. Assume that the company uses variable costing: a. Compute the unit product cost. Unit product cost b. Prepare an income statement for the year. Lynch Company Variable Costing Income Statement Variable expenses: Fixed expenses: References eBook & Resources Worksheet Learning Objective: 06-01 Explain how variable costing differs from absorption costing and compute unit product costs under each method Difficult