Variable and Absorption Costing.

Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations: Variable costs per unit: Manufacturing: Direct materials 25 18 4 Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $240,000 $ 90,000 During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the company's product is $83 peir unit. Required 1. Assume the company uses variable costing: a. Compute the unit product cost for Year 1 and Year 2. b. Prepare an Income statement for Year 1 and Year 2. 2. Assume the company uses absorption costing a. Compute the unit product cost for Year 1 and Year 2. b. Prepare an Income statement for Year 1 and Year 2. 3. Reconcile the difference between variable costing and absorption costing net operating income In Year 1 Complete this question by entering your answers in the tabs below Req 1A Req 1B Req 2A Req 2B Req 3 Reconcile the difference between variable costing and absorption costing net operating income in Year 1. (Enter any loss deductions as a negative value. Round your intermediate calculations to 2 decimal places.) Year 1 Year 2 Variable costing net operating income (loss) Add: Fixed manufacturing overhead cost deferred in inventory under absorption costing educt: Fixed manufacturing overhead cost released from inventory under absorption costing Absorption costing net operating income (loss)