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 Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $ 20 $ 13 $ 3 $ 2 $ 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 $58 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 hetween variable costinn and absorption costinn net onecation income in Year f a. Compute the unit prouULL LUSIU Cal Dual 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. Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1A Req 18 Req 2A Req 28 Req 3 Assume the company uses variable costing. Prepare an income statement for Year 1 and Year 2. Sales Variable expenses Variable cost of goods sold Variable selling and administrative Walsh Company Income Statement Year 1 Year 2 2,320,000 $ 2,900,000 14,400,000 80,000 18,000,000 100,000 ( Sales Variable expenses: Variable cost of goods sold Variable selling and administrative Year 1 Year 2 $ 2,320,000 $ 2,900,000 14,400,000 18,000,000 x 80,000 100,000 Total variable expenses Contribution margin 14,480,000 18,100,000 (12,160,000) (15,200,000) Fixed expenses: Fixed manufacturing overhead 240,000 240,000 Fixed selling and administrative expense 90,000 90,000 330,000 Net operating income (loss) $ (12.490,000) Reg 1A 330,000 $ (15,530,000) Rea 2A > Req 1A Req 1B Req 2A Req 2B Req 3 Assume the company uses absorption costing. Prepare an income statement f calculations to 2 decimal places.) Sales Cost of goods sold Walsh Company Income Statement Year 1 Year 2 $ 2,320,000 $ 2,900,000 Gross margin Selling and administrative expenses Net operating income (loss) 1,632,000 48,000 170,000 $ (122,000) Pari 2A 2,368,000x 19,000x 190,000 $ (171,000) 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 losses deductions as a negative value.) Year 1 Year 2 S Variable costing net operating income (loss) (12.490,000) (15.530.000) Add (deduct) fixed manufacturing overhead deferred in (released from) inventory Absorption costing net operating income (loss) 48.000 (48,000) $ 12,442.000) (15,578,000)