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 $ 12 $7 $ 2 $2 Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead $ 248,000 Fixed selling and administrative $ 158,000 During the year, the company produced 31,000 units and sold 21,000 units. The selling price of the company's product is $44 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.

Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: During the year, the company produced 31,000 units and sold 21,000 units, The selling price of the companys product is $44 per unit. Required: 1. Assume that the company uses absorption costing: a. Compute the unit product cost. b. Prepare an income statement for the yeat: 2. Assume that the company uses variable costing a. Compute the unit product cost. b. Prepare an income statement for the year