Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: 10 4 Variable costs per unit Manufacturing Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costo per year Fixed manufacturing overhead Fixed selling and administrative $ 5 1 $340,000 $250,000 During the year, the company produced 34,000 units and sold 16,000 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. 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 Absorption Costing Income Statement Sales $ 864,000 Cost of goods sold 400,000 Gross margin 464,000 Selling and administrative expense 266,000 Net operating income $ 198,000 Req 1A Req 1B Reg 2A Req 2B Prepare an income statement for the year. Assume that the company uses variable costing Lynch Company Variable Costing Income Statement Sales $ 864,000 Variable expenses: Variable cost of goods sold Variable selling and administrative expense $ 240,000 16,000 256,000 608,000 Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative 340,000 250,000 590,000 18,000 Net operating income $