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 $12 Direct labor $7 Variable manufacturing overhead $2 Variable selling and administrative $2 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 the absorption costing method: a. Compute the unit product cost. b. Prepare an income statement for the year. 2. Assume that the company uses the variable costing method: a. Compute the unit product cost. b. Prepare an income statement for the year .