waisn company manufactures and sells one product. ine following information pertains to each of the company's first two years of operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $ $ $ $ 29 14 5 4 $400,000 $ 80,000 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 $89 per 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. X Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 2B Req3 Assume the company uses absorption costing. Prepare an income statement for Year 1 and Year 2. (Round you calculations to 2 decimal places.) Walsh Company Income Statement Year 1 Year 2 Sales $ 3,560,000 $ 4,450,000 2,240,000 2,900,000 X 1,320,000 1,550,000 X Cost of goods sold Gross margin Selling and administrative expenses Net operating income (loss) 80,000 x 80,000 X $ 1,240,000 $ 1,470,000 DA Paa2 X Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Req 2A Req 2B Req3 Reconcile the difference between variable costing and absorption costing net operating income in Year 1. (Enter any losses or deductions as a negative value. Round your intermediate calculations to 2 decimal places.) Year 1 Year 2 $ 1,000,000 $ 1,370,000 80,000 Variable costing net operating income (loss) Add: Fixed manufacturing overhead cost deferred in inventory under absorption costing Deduct: Fixed manufacturing overhead cost released from inventory under absorption costing Absorption costing net operating income (loss) 80,000 $ 1,290,000 $ 1,080,000