Lynch Company manufactures and sells a single product. The following costs are incurred during the company's first year of operations.

Variable costs per unit:
Manufacturing:
Direct materials	6.00
Direct labor	9.00
Variable manufacturing overhead	3.00
Variable selling and administrative	4.00
Fixed costs per year:
Fixed manufacturing overhead	3,00,000
Fixed selling and administrative	1,90,000

During the year, the company produced 25,000 units and sold 20,000 units. The selling price of the companys product is $50

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.