Lynch Company manufactures and sells a single product. The following costs were incurred during the companys first year of operations:

Variable costs per unit:

Manufacturing:

Direct materials $ 11

Direct labor $ 4

Variable manufacturing overhead $ 1

Variable selling and administrative $ 1

Fixed costs per year:

Fixed manufacturing overhead $ 308,000

Fixed selling and administrative $ 218,000

During the year, the company produced 28,000 units and sold 24,000 units. The selling price of the companys product is $41 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.