UNIT PRODUCT COST IS $20!$Exercise $7-6($Algo$)$ Variable and Absorption Costing Unit Product Costs and Income Statements $[$LO$7-1,$

LO$7-2]$

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 $38,000$ units and sold $18,000$ units. The selling price of the company's product is $$61$ per unit.

Required:

Assume the company uses absorption costing:

a$.$ Compute the unit product cost.

b$.$ Prepare an income statement for the year.

Assume the company uses variable costing:

a$.$ Compute the unit product cost.

b$.$ Prepare an income statement for the year.

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Prepare an income statement for the year. Assume the company uses variable costing